In a penny auction participants pay a fee to place small incremental bids on items they want. Once the auction has ended the last participant to have placed a bid wins the item and pays the final bid price.
You can run a penny auction website without a licence from the Gambling Commission. We do not consider it gambling under the Gambling Act 2005.
However, as penny auction sites continue to evolve, we will continue to monitor the way in which they operate to ensure those providing facilities to gamble are properly licensed to do so.
If you are organising a penny auction it is your responsibility to ensure you are compliant with the law. If in doubt, you should seek legal advice.