Prize Competitions and Free Draws

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Prize Competitions & Free Draws

Lotteries & raffles are strictly regulated in law. 'Incidental non-commercial lotteries', 'private lotteries', 'customer lotteries' and 'free draws & prize competitions'  are the only types to enjoy exemption from registration. All other lotteries and raffles need to be registered either with the local authority or the Gambling Commission.

Prize Competitions

In prize competitions, success depends, at least in part, on the exercise of skill, judgement or knowledge by the participants. This distinguishes them from lotteries, where either success depends wholly on chance or, in a complex lottery, the first stage relies wholly on chance. Section 14(5) of the Gambling Act addresses this distinction.

Free Draws

An arrangement is a lottery only if the participants are required to pay to enter. Therefore free draws are not lotteries and are exempt from statutory control. Schedule 2 to the Gambling Act gives details of what is to be treated as amounting to ‘payment to enter’ for the purposes of distinguishing free draws from lotteries.

The Gambling Commission has issued Guidance to the Gambling Act covering 'free draws & prize competitions' and how to ensure their legality. 

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