Affilate or Pyramid?

I'm in the process of setting up a community site similar to sites such as faceparty, myspace, livejournal, facewhore..etc.. But with the best features from each one, plus a whole bunch more. It's going to hopefully be the ultimate "community" site out there.
Faceparty (which i personally think is crap), has over 3,000,000 members, so they must be doing something right.

We're also going to be putting aspects of flirting web sites in there too, just to attract some more mature members as well.

Now, my question is a bit of a legal one..

There are two registration options. Free Accounts, and Paid accounts. Free ones have limited access to stuff. They can still participate in the community aspect of it, and get a real feel for the place, but a lot it is limited.

Paid accounts, though, give you full access to the whole site. Registration costs £9 for a lifetime membership.
Now, when you register, your £9 is split into three.

£3 goes towards the maintanience of the site
£3 goes to the person who referred you to the site
£3 goes to a random member.

Potentially, you could easily make profit on the site by registering, beucase if you can get enough people to sign up you'll make your money back and more.
But, you're not paying to be able to do that as such. You're paying to have full access to the features of the site, and part of that is being able to become a highly paid affiliate.

So, would this be classed as a community site with very good affiliates scheme? or is it pyramid scheme? does anyone have any ideas?

Personally, i cant wait until the site is finished. If you're one of the first members, the chances are, you'll make your membership money back very very easily. You only have to refer 3 people to the site to make your money back anyway, and if you've got a web site, that could be very easy.

I'd like to hear your oppinions.
Cheers

Sorry.. sounds to much like a pyramid to me...

If you are distributing the £3 to a random member then it's probably ok as long as anyone can join for free.

If you only have winners who have paid an 'entry' fee then under uk law it would probably be classed as a lottery and I think you would require a license.

Hmm, well that's put a spanner in the works.

The idea behind it is...

The web site is mostly advertised as a community site. You can register for free, and take part in the big community, but you have limited access.
If you pay £9 for a lifetime* membership, you'll have full access to the community, and you're able to take part in the affilates scheme. (£3 per member you get to sign up).
That's primarily how i'm going to market it.

But yeah, I fully see the whole lottery aspect of it. Hmm. I suppose i'm going to have to seek some proper legal advice when I fully go ahead with this. Maybe i could put the referals up to £5 and scrap the lottery aspect.

Seeking proper legal advice seems like the only option