The Difference between a Competition and a Free Prize Draw

Many operators contact OnGameUK to ask if we can explain the difference between a UK Competition and a Free Prize Draw, and the regulatory differences between both.

The UK Gambling Commission states that both Competitions and Free Prize Draws can be run for commercial or private gain and can be used when promoting a product or raffling a high value item such as a car.

Before organising a free draw or prize competition, OnGameUK strongly suggests that you make yourself aware of the rules and regulatory risk, so your Competition or Free Prize Draw is within the law.

What is a Free Draw?

There are two types of free draws:

The first type of Free Draw is where all entries are free.

It must be noted that the Gambling Commission has clarified 'Free' as any method of communication charged at the normal rate and specifically refers to the use of first or second class post, and that 'normal rate' means that there can be no additional payment over what it normally costs to use a particular method of communication. For example, special delivery is not classed as free.

The second type of Free Draw has both a paid and a free entry route.

If you run a free draw with a paid entry route, you must make sure that:

• People can choose to take part without paying
• The free entry route can be no more expensive and must be no less convenient than the paid route
• The free entry route must also be available at the normal rate. For example, you cannot use special delivery in the free route and first class in the paid route
• The free entry route must be promoted and displayed at the same level as the paid for routes
• The choice between the free entry route and the paid entry route must be promoted so that people who want to participate can see it
• The system that determines prizes should not recognise the two routes as different.

What is a prize competition?

The UK Gambling Commission states that a prize competition is where the outcome is determined by the participants skill, judgement or knowledge, and that the organisers of a prize competition must be able to show that the skill, knowledge or judgement required will:

• Discourage people wishing to enter from doing so because it is too difficult
• Prevent a proportion of those who enter from winning a prize

It must also be noted that multiple choice questions, or questions that allow a second chance if your first answer is wrong, rarely meet these criteria.

Do I need a licence to run a Competition or Free Prize Draw in the UK?

You do not need a licence or permission to run a Competition or a Free Prize Draw in the UK as long as the Competition or Free Prize Draw is run in a way that meets the requirements of the Gambling Act 2005.

What happens if my Competition or Free Prize Draw does not meet the requirements?

If you do not meet the requirements then you may be running an illegal lottery.

Contact OnGameUK to discuss if your Competition or Free Prize Draw is legal.

If you are unsure whether your Competition or Free Prize Draw is legal or wish to discuss the regulations surrounding the differences between Competitions and Free Prize Draws, contact the team at OnGameUK.

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