The example UK business wants to run a weekly cryptocurrency lottery, in which cryptocurrency is initially exchanged for tickets, and the prize is cryptocurrency.
Participants would not purchase the cryptocurrency for fiat currency directly, so there would be no monetary transaction anywhere during the participation of the lottery. In this scenario, the prize is a large amount of cryptocurrency, which could be traded on some arbitrary, external cryptocurrency exchange, for other cryptocurrencies or money, but not directly through the company who hosts the lottery.
On the issue of crypto gambling, https://www.gamblingcommission.gov.uk/ says
Any gambling business wishing to offer gambling facilities to consumers in Great Britain using digital currencies, or virtual currencies that can be exchanged for cash or traded for items of value, must hold an operating licence.
However, I am unsure on the strictness of phrase
traded for items of value. The cryptocurrency could be traded for other cryptocurrencies - I'm not sure if they are considered
items of value, or even
items at all.
Would this crypto-only lottery be legally constrained by current UK lottery gambling laws and requirements?