We do not regulate prize competitions and free draws and you do not need a licence to run them. But you must be careful you do not organise them in a way which could constitute an illegal lottery.
Prize competitions can be organised commercially for private benefit and profit. This contrasts with lotteries, which can only be run for good causes. Sometimes what might seem like a competition could be classed as a lottery, and that may mean you are operating an illegal lottery. We have therefore published advice to help explain the difference.
A quick guide to Running prize competitions and free draws
Unlike a lottery where the outcome depends on chance, the outcome of a genuine prize competition must depend on the exercise of skill, knowledge, or judgment by the participant.
Gambling Act section 14 (5) explains in detail about the skill test
The element of skill, knowledge or judgment in a competition must prevent:
- a significant proportion of people from taking part or
- a significant proportion of people who do take part from receiving a prize.
If your competition relies on chance it may be considered a lottery and could be illegal.
We monitor the boundary between lotteries, competitions and free draws to make sure that people who organise lotteries are properly licensed and if we have concerns that your scheme may be a lottery we may ask you to provide information to show how you have met the test at section 14(5) of the Gambling Act 2005.
We do not approve or provide advice on how to run your particular competition. The rules and conduct of your competition are solely your responsibility.
If you are organising a prize competition it is your responsibility to ensure you are compliant with the law. If in doubt, you should seek legal advice.