Plenty of businesses were interested in news this year that one owner was looking to exit their business by way of a raffle. But the novel approach has turned out to be anything but smooth-sailing.
In April, Natalie Giumelli explained how she had decided to put her dog boarding business Yapper Valley Pet Resort, and its adjoining land and family home, near Townsville up for grabs by way a competition dubbed “Win a Pet Lovers Dream”.
Entrants were required to purchase a digital photograph to be entered into the draw, with a minimum of 40,000 image sales needed in order to deliver the prize package.
Under the competition’s terms, if less than this number of entries were sold, the winner would take home half of the money raised.
“We decided to exit the business this way as we realised that people have great difficulty obtaining finance on a property especially business loans,” Ms Giumelli told My Business at the time.
The draw was originally due to run for 12 weeks with a winner to be drawn on 22 June; however, the draw date was subsequently pushed back.
Just over a month later, Ms Giumelli told My Business that “we have had a lot of interest in the business”, and that her approach to exiting the business had inspired other business owners to consider doing the same.
“We have had a lot of people enquire about carrying out a competition of their own,” she said.
“We have also had a lot of people sharing stories of others doing a similar thing. It’s great to see so many other people who are embracing this concept.”
Competition beset by difficulties
At the time, Ms Giumelli admitted that the competition had faced some difficulties, noting that “there has definitely been a few who think it is a scam”, although she had said this was “to be expected”.
“It’s not your typical prize and is largely unheard of,” she said.
Now, the competition’s website declares that “John and Kate M. from NSW” were declared the winners, however it stated that they “were both very excited to take home the cash prize”, suggesting that ticket sales had indeed fallen short of the 40,000-strong target.
There was no mention of how many entries had been received or when the winners were announced.
But the competition also ran into problems with state authorities.
On 19 August, Yapper Valley Pet Resort announced on its Facebook page that the competition had been instructed to stop accepting entrants from Queensland.
“We have been advised by regulatory authorities in QLD to cease this promotion in QLD. Everyone who has already entered will remain eligible for the draw but we will no longer be able to accept entries from QLD residents after 20/08/19. Non-QLD residents of Australia (excluding SA) can continue to enter until 23/09/19. The draw will proceed as per the Terms and Conditions,” the post stated.
A month later, Queensland’s Office of Liquor and Gaming Regulation (OLGR) revealed that it had deemed the terms of the competition to be unlawful and had taken legal action against the small business.
“Our investigation deemed the promotion did not comply with the Charitable and Non-Profit Gaming Act 1999,” the agency’s acting executive director David McKarzel said in a statement, noting that the competition was “considered a Category 3 game in Queensland, a game which required a licence”.
“A licence was not held and it is unlikely that one would have been issued because the competition was not for a charitable purpose, but for private gain,” Mr McKarzel said.
“Further, the terms and conditions of the competition included that if not enough entries were sold, the major prize of the pet resort would not be delivered and would be substituted for a lesser prize.”
He said that the regulator had made “several unsuccessful attempts” to have Yapper Valley Pet Resorts “remove Queensland residents from the competition and refund their entries”, before taking the matter to the Supreme Court.
“OLGR had no other option than to file an application in the Supreme Court seeking [an] injunctive and other relief in respect to the competition,” he said, noting that its application had been approved by the court on 16 September, 2019.
“We’re pleased with the court’s order today.
“This order now means the promoter is to remove all Queensland residents from the competition and refund, in full, the entry fees paid by Queensland residents.”
Yapper Valley Pet Resorts had not responded to repeated requests for comment by the time of publishing.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.