Are online prize competitions legal in the UK?

The short answer

The Gambling Act 2005 does not ban prize competitions. It bans unlicensed lotteries. So when people ask "are online prize competitions legal?", the real question is whether a competition is a lottery in law.

The Gambling Commission says that free draws and prize competitions do not need a licence if they are run in line with the Act. It also says it does not approve them or help to design them. The responsibility is yours as the organiser.

This guide covers Great Britain. Northern Ireland has its own gambling law, so take separate advice if you want to run there.

This is general information, not legal advice. Take advice from a solicitor before you launch.

What counts as a lottery

Section 14 of the Gambling Act 2005 defines a lottery. In plain terms, an arrangement is a lottery, however you describe it, if:

• people pay to take part;
• prizes are given to some of the people who took part; and
• the prizes are allocated wholly by chance (or through a series of processes where the first relies wholly on chance).

Section 14(4) says a prize includes money, articles or services. Section 14(1) says an arrangement is a lottery whatever it is called, so naming it a "competition" or a "draw" changes nothing. What counts is how it works.

Running a lottery without a licence or registration is an offence. Lotteries can only be run under a Gambling Commission licence, or by registered non-commercial societies and local authorities. If you want the charity route, read our guide to charity competitions and raffles.

Two ways to stay outside the lottery definition

1. A real skill test

Under section 14(5), a process that needs skill, judgement or knowledge is treated as relying wholly on chance if the requirement cannot reasonably be expected to prevent a significant proportion of people from winning, and cannot reasonably be expected to prevent a significant proportion of those who want to take part from doing so.

So the test has to bite. A question everyone gets right does not make your competition a skill contest. The Commission says multiple choice questions, and questions that allow a second go after a wrong answer, rarely meet the standard. Read more in skill questions for prize competitions.

2. A free entry route

Schedule 2 to the Act sets out when an arrangement is treated as needing payment. Under paragraph 8, it is not treated as needing payment if people can choose between paying and sending a communication instead, the free option is no more expensive or less convenient than paying, the choice is publicised so people are likely to notice it, and the prize system treats both kinds of entry the same. Without payment, there is no lottery. This is a free draw. See the free entry route explained.

Many UK operators use both: a skill question and a free postal route. Niche supports both, so you are not relying on one defence alone.

What the Gambling Commission expects

The Commission publishes guidance on free draws and prize competitions. Its main points are:

• A prize competition is one where the outcome depends on the entrant's skill, judgement or knowledge, and the organiser must be able to show the skill test is real.
• For a free draw with a paid route, the free route must be promoted and displayed at the same level as the paid routes.
• Free postal entries must go by first or second class post. Special delivery is not classed as free.
• If the requirements are not met, the activity may be an illegal lottery and the Commission may act.

The Commission does not license or approve genuine prize competitions and free draws. That does not make them risk free. Trading standards, the Advertising Standards Authority and the courts can all act.

Other rules that apply even if it is not a lottery

• Advertising. The ASA enforces Section 8 of the CAP Code on promotional marketing. It requires prizes to be awarded as described or a reasonable equivalent (rule 8.15.1), any free route to be explained clearly and prominently (rule 8.17.2), and draws to use a verifiably random computer process or an independent person (rule 8.24).
• Consumer law. Your terms must be fair and your pricing and prize descriptions must not mislead.
• Data protection. You will hold personal data. See our GDPR guide for competition websites.
• The DCMS voluntary code. In November 2025 the government published a voluntary code for prize draw operators. It is not law, but many operators have signed it, and it expects 18+ entry and a £250 monthly cap on credit card spend. See the DCMS code explained.

A practical checklist before you launch

1. Decide your model: a skill competition, a free draw, or both.
2. Write a skill question that is hard enough to stop a real proportion of entrants. Keep a record of your reasoning.
3. Offer a free postal route, publicise it as prominently as the paid route, and make sure the draw treats free and paid entries identically.
4. As a precaution, do not price a ticket below the cost of a stamp. The Act names ordinary post as an acceptable free route, but if paying is cheaper than posting, a regulator may doubt that people have a real choice.
5. Prove you own or have bought the prize before you sell a ticket.
6. Use a draw method you can verify and publish.
7. Check ages, take payments through a UK acquirer and offer spend limits.
8. Have a solicitor read your terms and your skill question.

Niche has a go-live check that blocks competitions priced below a stamp or with too short an entry window, and a prize-proof gate that asks for proof the prize is bought before a competition goes live. The rest of the build is in our guide to starting a competition website. See pricing for plans.

Frequently asked questions