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What is a Prize Competition?
What is a prize competition and is it the same as an online prize draw?
The quick answer is, yes, they are both exactly the same thing. A ‘Prize Competition’ is the official term used by the UK Gambling Commission. This term describes a particular prize draw that follows a set of rules that places it outside of the usual uk gambling laws. The term ‘prize draw’ is what we (Rafflers) refer to as prize competitions.
Why is a Prize Competition not classed as Gambling?
According to the Gambling Commission..
“A prize competition is where the outcome is determined by the participants skill, judgement or knowledge”
The Gambling Commission does not approve or help to develop prize draws. This then places such competitions outside of the usual gambling laws stated by the Gambling Act 2005. Such competitions are then not classed as gambling.
Does the Gambling Commission regulate Online Prize Draws?
Prize draws are not classed as gambling by the Gambling Commission. This means that they do not regulate such competitions.
However, any prize draw that does not follow the standard rules can be investigated by the Gambling Commission. This is because any prize draw not abiding by the rules is classed as an ‘illegal lottery’. Once a draw becomes a ‘lottery’, the rules are exceptionally different and a licence is required.
As soon as an online prize draw is found to be running as an illegal lottery, the gambling commission will begin their investigation. The online prize draw business running the illegal lottery could find themselves with a hefty fine. Furthermore, their reputation will be ruined and the business maybe shut down depending on the findings of the investigation.
See further information about the rules and regulations of online prize draws over at What is the law for online raffles?