What is a Prize Competition?
What is a prize competition and is it the same as an online raffle?
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 competition that follows a set of rules that places it outside of the usual uk gambling laws. The term ‘Online Raffle’ is what we (Rafflers) refer to as prize competitions.
Why is a Prize Competition not classed as Gambling?
According to the Gambling Commission..
[row_inner] [col_inner span__sm=”12″ padding=”10px 10px 10px 10px” bg_color=”rgb(248, 248, 248)”]“A prize competition is where the outcome is determined by the participants skill, judgement or knowledge”
[/col_inner] [/row_inner] [row_inner] [col_inner span__sm=”12″]The Gambling Commission does not approve or help to develop prize competitions. 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 Prize Competitions?
Prize competitions are not classed as gambling by the Gambling Commission. This means that they do not regulate such competitions.
However, any prize competition that does not follow the standard rules can be investigated by the Gambling Commission. This is because any prize competition not abiding by the rules is classed as an ‘illegal lottery’. Once a competition becomes a ‘lottery’, the rules are exceptionally different and a licence is required.
As soon as a prize competition is found to be running as an illegal lottery, the gambling commission will begin their investigations. The 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.
[row_inner_1] [col_inner_1 span__sm=”12″] [row_inner_2] [col_inner_2 span__sm=”12″]See further information about the rules and regulations of online raffles over at What is the law for online raffles?
[/col_inner_2] [/row_inner_2] [row_inner_2] [col_inner_2 span__sm=”12″] [accordion title=”FAQ’s: What Is an Online Prize Draw?” faq_schema=”true”] [accordion-item title=”What is an online prize draw?”]A prize competition is the official legal term used by the UK Gambling Commission to describe a prize draw where the outcome depends on skill, knowledge or judgement, rather than pure chance.
In simple terms, participants must answer a skill-based question correctly in order to enter or win. Because of this skill element, the prize draw sits outside standard UK gambling laws.
[/accordion-item] [accordion-item title=”Why is a prize draw not classed as gambling?”]Under the Gambling Act 2005, gambling typically involves activities based purely on chance.
A prize draw is different because:
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The outcome is not determined entirely by luck
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Participants must use skill, judgement or knowledge
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A correctly structured competition avoids being classed as a lottery
Because of this skill element, prize draws are not automatically regulated as gambling activities.
[/accordion-item] [accordion-item title=”Does the Gambling Commission regulate prize draws?”]No — not directly.
The UK Gambling Commission does not regulate prize draws in the same way it regulates licensed gambling operators.
However, if a prize draw fails to meet the legal requirements — for example, if the skill question is too easy or the free entry route is not compliant — it may be reclassified as an illegal lottery.
At that point, the Commission can investigate.
[/accordion-item] [accordion-item title=”What is an illegal lottery?”]An illegal lottery occurs when a prize draw:
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Relies entirely on chance
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Does not include a genuine skill-based question
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Does not provide a valid free entry route
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Charges for entry without meeting legal requirements
Once a prize draw is deemed a lottery, it requires a gambling licence. Operating without one can lead to serious consequences.
[/accordion-item] [accordion-item title=”What happens if a prize draw becomes an illegal lottery?”]If a business is found to be running an illegal lottery:
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The Gambling Commission may investigate
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The business may face substantial fines
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Operations could be suspended or shut down
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The company’s reputation may suffer significant damage
Compliance is therefore essential for any UK online prize draw business.
[/accordion-item] [accordion-item title=”Why do prize draws need to follow strict rules?”]Prize draws must follow clear rules to:
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Stay outside UK gambling law
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Avoid being classified as a lottery
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Protect entrants
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Maintain fairness and transparency
If the required standards are not met, the prize draw may fall under gambling regulations and require a licence.
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