I understand on a rational level that this is less fair to bidders and a bad model if you want to just buy things, but I don't see where this is a game of chance instead of a consequence of who is participating.
I suppose because you pay a small amount of money and you may or may not get something valuable out, which makes it effectively gambling from the bidder's point of view.
> but I don't see where this is a game of chance instead of a consequence of who is participating
From the point of view of an individual bidder, "who else is participating" is a matter of chance.
Penny auctions involve naming a price, purchasing a bet nobody else will name a valid price after you, and you receive the item only if your bet wins, in which case your "prize" is actually an option to buy the item at your named price.
What's ridiculous beyond belief is that the "skill level" involved is sufficient to make it not gambling when poker is a regulated game...
"A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome." [1]
This is not a contest of chance, and there is no future contingent event. Other participants future actions within this event do not count as a "future contingent event."
It's absolutely a contest of chance. There's no skill at all, you're betting on the probability nobody else will bid in the next 15 seconds.
If this is considered a game of skill I have no idea how you could defend sportsbetting or poker being gambling
Assuming the house is not cheating and using shill accounts (which does happen, but IS illegal) then the last person to continue bidding wins. So in that regard it is by definition not chance. You just continue to bid until no one else bids and then you win.
There are many different legal definitions of gambling (even in the US -- each state that regulates gambling has at least on definition of its own, as well as the feds, and the same jurisdiction may have different definitions in different laws) but the one you posted upthread requires only that the future contingent event on which one participant is at risk be out of control of that participant, not that it must be "exogenous to the participants".
This is the crux of your argument, but your link doesn't seem to address it. Do you have another source?
More importantly, these penny auctions lack is transparency. The argument is that they're not gambling because it's a game influenced by skill, but for that to be true you would need transparency into who many bids have been made, by which people, with what timing. This doesn't appear to be possible without running an aggregation script.