Getting a Bank Account for a Competition or Free Prize Draw Business

Having worked extensively with competition and free prize draw operators seeking bank accounts, OnGameUK explains why you might find it difficult to open a UK business bank account for your website.

This is mainly due to 2 reasons, firstly both high street and online banks consider Competition and Free Prize Draw businesses to be 'High-Risk'. The second reason is the high amount of B2C (Business to Consumer) payments / instant wins and cash payouts which are made on a daily, weekly and monthly basis.

However, many UK banks also feel that operators have unclear revenue models and since banks must comply with anti-money-laundering (AML) and financial crime rules, nearly all banks will refuse accounts, delay approvals and / or block or close an account with little or no notice.

The Competition and Free Prize Draw Sector is Unregulated – Correct?

That is correct, however even if you're running a legitimate competition or prize draw, banks might worry that:

• Competitions and Free Prize Draws are too high risk
• Your business could be mistaken for an illegal lottery
• You're selling entry tickets (which can be interpreted as gambling)
• You might need special licensing or oversight
• There is a risk of anti-money-laundering, fraud or corruption.

How Can I get a Bank Account for a UK Competition or Free Prize Draw Business?

Some fintech or challenger banks are more flexible with 'non-standard' businesses such as Competition or Free Prize Draws and may offer you an account, these include:

• Digital business banks or EMI's (e-money institutions)
• Specialist business account providers that understand high-risk sectors.

What Do I need to Prepare to get a Bank Account?

OnGameUK strongly suggests that within an application you clearly state that you wish to open an account for a UK Competition or Free Prize Draw Business, otherwise like hundreds of other operators, upon the bank discovering you are running a Competition or Free Prize Draw Business, you run the risk of having your account locked or closed down with little or no notice.

Additionally, OnGameUK suggest that you have the following:

• A well written and detailed business plan
• A website that is launched, or close to launch
• Clear and concise terms & conditions and policies
• A RMG or legal opinion
• Evidence that the free entry route that is promoted and displayed at the same level as the paid for routes
• ID and documentation for all company directors
• Clear evidence of how you will pre-fund and fund the businesses
• SIC code that fits general entertainment is also advised.

Which Banks are Likely to Refuse an Application?

You might be lucky and receive a bank account with a handful of high street and major on-line banks, however in nearly all cases, once the bank discovers you are running a Competition and Free Prize Draw Business or paying a large number of B2C payments, they will either lock or shut your account. This has been the case for nearly all businesses within the UK Competition and Free Prize Draw sector. With account closures generally taking place with no notice, this has led to loss of business, revenue and reputation for hundreds of operators.

Can OnGameUK help Competition and Free Prize Draw Businesses to Open a Bank Account?

Yes – OnGameUK can assist you with your application and to open a UK Bank Account.

In recent times, the OnGameUK team have assisted many Competition and Free Prize Draw Businesses to open and retain UK bank accounts. We have assisted businesses ranging from start-ups with no trading history to some of the larger sites with turnover in-excess of £40 million a year.

If you are struggling to open a bank account or have been locked out of your existing account, contact the team at OnGameUK who we will be happy to help.

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