Running free competitions in the UK

Running free competitions

in the UK

Introduction to free competitions Running a free competition can be an

effective way to engage audiences, promote products, and build brand awareness. Unlike lotteries, which are regulated and restricted to non-commercial purposes under the

Gambling Act 2005, free draws and prize

competitions are not subject to the same

level of statutory control. This guide will help you navigate the nuances of organising a legal and compliant free competition.

Understanding the key distinctions

This guide includes detailed points and practical advice to help organisers navigate the requirements of free competitions and avoid legal pitfalls.

A competition’s classification under the

Prize competitions: Depend on skill, judgment,

competition could lead to it being deemed an

these factors rather than chance.

Gambling Act is crucial. Misclassifying your

illegal lottery. Here are the main categories: Lotteries: Involve a payment to participate

and prizes allocated wholly or primarily by chance. They must be operated under a

or knowledge. The outcome is influenced by

Free draws: Participants are not required to pay to enter, making them exempt from statutory control.

licence unless exempt.

•

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The role of skill in prize competitions The defining feature of a prize competition is that success must be influenced by skill or knowledge. To meet legal requirements:

Sufficient challenge: The competition should

Avoid overly simple questions:

to prevent a significant proportion of participants

known answers (e.g., a question with an

include tasks or questions that are difficult enough from succeeding effortlessly. For instance, complex puzzles, crosswords with numerous clues, or

knowledge-based challenges are acceptable.

Competitions that use simple or widely answer easily found online or in the

competition materials) are likely to be considered lotteries.

“Section 14(5) of the Act stipulates that a prize competition must deter a significant proportion of participants either by preventing them from entering due to the challenge or by preventing many from winning. If the requirement is easily met by most, it risks being classified as a lottery.”

Ensuring free entry compliance A key characteristic of a free draw is that no payment is required to enter. Payment includes anything above the ‘normal rate’ for communication methods. Follow these guidelines to ensure compliance:

Genuine free route: Offer an entry

Transparency in

No hidden costs: Ensure

sending an email or letter via

entry routes equally, ensuring

to pay to learn if they

free choice.

their prize.

route that is entirely free (e.g.,

ordinary post) and ensure it is just as accessible and advertised as any paid routes.

communication: Display all

participants do not need

participants know they have a

have won or to collect

Organising online entries For web-based competitions, it is important to address potential barriers to entry and the convenience of different methods:

Web access timing: Ensure that participants can enter online at any time during the promotion

period. For televised competitions or limited-time

promotions, web access should be available while other methods (e.g., SMS) are open.

“Free entry routes should be just as accessible and advertised as paid routes.”

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Organising online entries (continued…)

Adequate publicising: Make sure that the

Reasonable response time: Allow

known through appropriate channels and not

web access, ideally at least three working

participants sufficient time to find and use

availability of the free web-based entry is made

days, ensuring fairness in participation.

overshadowed by paid methods.

Practical steps for organisers If you are using skill-based entry rather than a free entry route, these steps are essential: o

Develop challenging content: The questions or tasks should not have answers that can be easily obtained or are well-known. Use multi-step logic problems, word puzzles, or in-depth knowledge questions.

o

Document your processes: Keep records showing that your competition genuinely

requires skill. This might include data from previous competitions, test results, or

participant feedback to demonstrate that the skill requirement prevents easy success. o

Assess skill barriers: Be prepared to show how the competition reasonably prevents a significant proportion of entrants from winning due to the skill element. This can

involve pre-testing the challenge on sample audiences and recording the results.

If you provide both paid and unpaid entry options: Equal prominence: Ensure both options are equally visible and convenient. The unpaid

method should not be harder to find or use than

Impartial prize allocation: Prizes must be

distributed without favouring paid entries.

the paid one.

Product linked promotions A competition tied to a product purchase must

ensure that the product’s cost does not reflect a participation fee. This means: •

Maintaining standard pricing: The price of a product linked to a promotion must not be

•

artificially inflated during the competition period.

Transparent promotions: Clearly show that any

entry related to purchasing a product is truly free of charge beyond the usual product cost.

“Ensure no part of the entry process indirectly involves a payment, including costs linked to discovering results or claiming prizes.”

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This guide is an overview and is NOT intended as a substitute for professional legal advice.