Do Online Prize Draw Providers Need A Licence?

Online prize draw (prize competition) providers do NOT require a gambling licence or any other licence to run their prize draws. This is because they are not classed as ‘Gambling’ by the UK Gambling Commission.

However, if online prize draws do not meet the required criteria outlined by The Gambling Commission, they will be deemed as an ‘Illegal Lottery’. If this is the case, then the draw provider in question will be investigated and most likely shut down.

Why is a Licence Not Needed?

To learn in detail about why online prize draws are not deemed as gambling, you can venture over to ‘What is the Law for Online Raffles’. 

In brief, The Gambling Commission class online prize draws (prize competitions) as the following..

“A prize competition is where the outcome is determined by the participants skill, judgement or knowledge. ”

By including a skill based question or puzzle, an online prize draw will be..

“placed outside of the scope of the Gambling Act and generally do not require any licensing or regulation from the Gambling Commission”.

The Gambling Commission state that the skill based question must be difficult enough for a ‘significant’ amount of people to get it wrong. If the draw provider chooses to provide an easy question, then a free entry route must be available.

Please note that the official name for online prize draws, outlined by the Gambling Commission, is ‘prize competitions’. The term ‘online prize draw’ is what we (Rafflers Ltd) refer to to describe such competitions. Prize Competitions are the exact same type of competition that follow a certain set of rules and regulation.

For a more detailed explanation about online prize draws, you might like ‘What is the Law for Online Raffles’.