Where do all the Omaze millions REALLY go?
As the winner of prize draw for this £3.5m mansion in Cheshire is handed the keys...
The wait is finally over. The winner of the latest Omaze mansion to go up for grabs will be revealed today. Cue close-ups of jaws dropping, tears welling and champagne corks popping as the lucky recipient is told the good news.
They will be handed the keys to a fully furnished, five-bedroom pile in Cheshire worth £3.5m which they can move into, rent out or sell on.
Chances are that they will choose the latter – most winners prefer to cash in straight away.
Whatever they decide, it is likely to be life-changing – and it’s all theirs after spending as little as £10 on a ticket.
Omaze is the prize draw craze sweeping the country, offering luxurious homes from Cornwall to Scotland, raising millions for good causes in the process.
So who is behind it, how is it funded, and is it as altruistic as it’s made out to be – or is it, in fact, a giant money-spinner for its owners?
Like so many modern crazes, Omaze began in the US.
It was founded in Los Angeles in 2012 by Matt Pohlson, the son of a judge and a fundraiser, and Ryan Cummins, both graduates of Stanford University.
They came up with the idea after a charity event where LA Lakers legend Magic Johnson was auctioning fans the chance to play basketball with him.
What the pair saw was the huge potential of ‘incentivised giving’ – that is, donating to charity with a chance of personal reward.
That’s when they set up Omaze Inc in the US. The venture was far from an overnight success but the breakthrough came when Pohlson, an accomplished networker, managed to corner Bryan Cranston, star of the hit TV series Breaking Bad, at a charity event.
Cranston and his co-star Aaron Paul were persuaded to sign up and, over the course of the final season of Breaking Bad in 2013, raised £1.4m.
Celebrities proved to be a winning formula – so they doubled down. Before George Clooney married his wife Amal, Pohlson arranged for him to raffle himself off as a date in 2014. Pohlson acted as chaperone.
The UK offshoot of Omaze was launched during lockdown in 2020 when everyone was cooped up at home dreaming of a bigger, better roof over their heads.
Although the UK business is wholly-owned by Omaze Inc in the US, they are run in different ways.
WHEREAS the US operation offered ‘experiential’ prizes, such as hanging out with celebrities, the British business shamelessly tapped into our obsession with house prices and climbing the property ladder.
It offers a monthly prize draw with the chance of winning a luxury property in the UK.
Its slick website and seemingly relentless TV adverts and social media posts exude opulence and escapism.
‘You get the enjoyment of entering and fantasising about the incredible prizes and contributing to something meaningful,’ Omaze’s UK boss James Oakes, 46, told the Mail.
‘We are one of the biggest corporate charity donors in the UK now,’ adds the former City derivatives trader, 46, who did a master’s degree at the London School of economics and lives in Richmond with his wife and two sons.
The ‘for-profit’ fundraising company guarantees a minimum £1m donation to every charity partner – or 17pc of ticket sales, whichever is the larger – regardless of how many people enter the draw.
After paying other expenses such as buying the home on offer, mass-marketing campaigns and staff wages, the rest is kept as profit. Up to £200,000 is spent each time on doing up the home before a huge marketing blitz.
Individuals can buy tickets worth up to £500 a month.
The winner is handed the dream home mortgage-free and there’s no stamp duty or conveyancing fees to pay.
On top of that, £100,000 is thrown in to help the new owners settle in. Since launching in the UK, Omaze’s website says it has raised over £34m for charities such as Teenage Cancer Trust, Alzheimer’s Research and Marie Curie.
It has also raised £3m for the British heart Foundation, a charity that means a great deal to Pohlson. he survived a type of heart attack in 2018.
It turned out he had a bowel obstruction, which was linked to surgery he had when he was a child, and he went into cardiac arrest in hospital.
‘I just collapsed,’ Pohlson, 46, recalled. ‘It was like somebody flipped the switch off.’
The latest prize draw, Omaze’s 25th, will benefit Bowelbabe, the bowel cancer charity founded by dame deborah James, who died of the condition at the age of 40.
Omaze insists it not running a lottery or sweepstake, which means it can operate outside gambling rules.
It certainly differs from the national Lottery. The odds of winning the lottery jackpot are fixed whereas the chances of bagging an idyllic Omaze pad depend on how many people buy tickets.
however, Omaze refuses to say exactly how many people participate each time and how much they spend.
‘There are typically hundreds of thousands of entrants each month,’ says a spokesman.
They spend an average of £10 to £20 each.
AROUND 1pc of total revenue raised by the national Lottery is retained as profit, with 95pc of it going to the winners and society.
Omaze’s model is more opaque. What is clear is the extent to which the US parent company has bankrolled the UK arm.
Co-founder Pohlson raised £68m in 2021 from backers including U2 rock star Bono and US actress Kerry Washington.
Some of that propped up the British business, latest accounts show, with Omaze relying ‘on the support of its parent company to finance working capital requirements’, including an interest-free loan of £8.6m.
no profit and loss figures are given because Omaze is classed as a small company and exempt from publishing a full set of accounts. It expects to become profitable in the UK this year.
The Cheshire mansion in today’s draw is in Prestbury, a village 20 miles south of Manchester in an area favoured by celebrities and footballers.
It has a gym, cinema room and a ‘handcrafted kitchen’.
Property website On The Market reckons it could be rented out for more than £11,000 a month.
It was last sold for £2.75m in december 2020, Land Registry records show.
But like some other Omaze properties, there is a catch. Locals say it had been up for sale for some time before Omaze bought it. Apart from the hefty price tag, one reason the mansion may have been hard to shift is its location.
The ‘dream home’ is actually on a narrow rat-run, which connects the picture postcard village to a main road.
Cars often queue up outside the electronic front gates as they slow down to squeeze past each other.
There is no pavement either, meaning the short trip to the nearby train station or tennis club involves either a hairy walk along the busy cut-through, or driving.
But even before the winner of the Cheshire home is unveiled, the Omaze marketing machine is already in overdrive, pushing the next big prize – a £2.5m forest house in dorset.