It appears that some countries have spotted this: http://www.pennyauctionwatch.com/2010/04/italy-shuts-down-lo...

Lowest-unique bid auctions and penny auctions are different things though. The former is often considered gambling while the latter not.

Do you have any idea why that is?

Poker and sports betting are considered gambling despite being sufficiently complicated processes st. a small minority of participants achieve regular profits against virtually any field. I would be happy to bankroll Phil Ivey to play poker Tony Bloom to bet on football.

https://en.wikipedia.org/wiki/Phil_Ivey

https://en.wikipedia.org/wiki/Tony_Bloom

Both low-bid and penny auctions seem much simpler to me. I can't see how consistent profitability is achievable when playing with non-crazies?

Good question. This is what the Swedish Gaming Board says about it:

http://www.lotteriinspektionen.se/sv/Icke-tillstandsgivet/La...

Lowest-bid auction: "In a lowest bid wins the auction it alone in having placed the lowest bid and not the one who placed the highest bid. In this way, it is largely a matter of chance decides who wins. We therefore believe that the lowest bid auctions are a lottery and not an auction."

Penny auction: "In our opinion this is not a lottery in the legal sense, because it is the highest bid within a certain time "wins". It is not chance that determines who gets the goods. In this way, a penny auction works the same way as a normal auction."

(Google Translate, may do a proper translation later.)

That analysis doesn't seem to apply any more when there's a price ceiling (such that every subsequent bid is after that point bids the same price).

> That analysis doesn't seem to apply any more when there's a price ceiling (such that every subsequent bid is after that point bids the same price).

Or, as pointed out in the article occurs with penny auction sites, when some bids actually drop the price rather than raising it.

Thank you. Seems strange to me, but I'm not a lawyer.

I agree. I wish they would elaborate on it.