Via CodingHorror — Penny Auctions: They’re Gambling, on “Swoopo”, a penny auction site where you need to buy credits before you can start bidding.
Because Swoopo is, at its heart, thinly veiled gambling. The companies backing Swoopo and other Penny Auction sites are hoping unsophisticated regulatory agencies will buy the “It’s not a game of chance” argument if it’s wrapped in a lot of technical intarweb mumbo-jumbo they can’t fully comprehend.
Reminds me of many unique bid auction sites that surfaced online 2 years ago, where some of them have actually been covered here on the OzBargain blog. I actually went to the Swoopo site and it does feel like gambling — and it’s addictive. I can just sit there and watch the clock counts down to 0, or bounds back to 15 second again with more bidding action.
It’s actually worse than gambling because not only you need to pay for entrance, win the auction purely by chance (and risk loosing your money not winning the auction), addictive in nature which you ended up spending more than you should because you don’t want to lose out — you still need to pay for than damn thing when you win.
But somehow it has gained a lot of popularity according to Alexa. I guess the old saying is right. Every second on Swoopo, “a fool and his money is soon parted”.
Good point there. I’ve noticed they call it entertainment shopping. Like you say it looks like gambling and feels like gambling, So it must be just that. A new penny auction pops up every day.
Hi
You are right it is a form of gambling but where the bidder has more control over where they stand within the auction and also the odds are much much better here than in any lotteries related games.
The better the odds the better the game.
Cheers
I really don’t think you can say they are gambling. We can argue about penny auctions for better or worse, but there is not element of chance in these games so I don’t see the gambling factor. I wrote about this on my penny auction blog, Penny Auction Insider, several weeks ago. Here is the link to the original post:
http://penny-auction-insider.blogspot.com/2009/07/it-isnt-gambling.html
I’d agree with Penny Auction Insider. There is no ‘luck’ involved, just the actions of competitors that leads to your loss or win. It’s an interesting subject. This entry of my blog http://www.pay-per-bid-online-auctions.blogspot.com/2009/11/what-are-odds-of-winning-penny.html in particular might be interesting to you.
Yah obviously I am agree with this point that Penny Auctions or bidding for any item is taking a chance. But if the bidder will be pretty confident then the chance of winning is greater.
Regards
I submit that it is gambling. The item is just a distraction.
Replace the item with a cash prize – then see if you could get a “Penny Auction” past gambling regulators.
They are in no way gambling. Gambling involves luck, where as penny auctions are all about strategy. You can get lucky and win the same way a guy might hit a long tee shot his first time golfing, but that’ll be it – you get one. The people who win are the ones who invest some time into learning how it works. Those who think they’re gambling are the ones who are just too confused to figure out the system.
@ Gene:
The bids are not bids. They are bets. Bets are a sunk cost that you do not get back, regardless of whether you win or lose.
Can you guarantee that you will win a particular auction and pay less then the cost of an item? No.
Gambling.