A code of good practice for prize draw operators comes into force in the UK next week. Ahead of their introduction, the competitions are facing criticism over claims that they do not offer players the same protections as regulated gambling.
Officially, the UK does not classify prize draws as gambling if they include a free-to-enter option for users. Operators, therefore, do not require a license to run the competitions that offer entrants the chance to win anything from cars to houses to holidays to cash prizes. “Prize draws are a significant and growing market,” said the UK government when announcing the voluntary code last year.
Research in 2023 highlighted that the UK market is worth £1.3 billion annually, with 7.4 million adult participants and over 400 operators.
What is the New Code?
Companies could voluntarily sign up to the new code, which must be implemented by May 20. It contains several rules, including:
- Age Restrictions: Operators must limit participation to those aged 18+ and implement age verification checks.
- Spending Caps: There should be a limit of £250 per month per player on credit card payments.
- Harm Monitoring: Operators are expected to use “reasonable efforts” to monitor player activity for signs of compulsive behavior and provide “cooling-off” periods or account suspension tools.
- Transparency on Odds: Where possible, operators should state the likelihood of winning (e.g., by disclosing the maximum number of tickets available).
- Free Route Prominence: The “free entry” option must be displayed as clearly as the paid option, ensuring it remains a “genuine choice” rather than a hidden loophole.
Almost 200 companies have signed up, such as leading operators Omaze, BOTB, and Raffle House. An Omaze spokesperson said the introduction of the code of conduct was a “positive step in further strengthening standards across the sector.”
“Omaze has long been a pioneer in customer safety practices, and we are proud that many safeguards that we have long-employed voluntarily are now formalized in the code for our sector,” the company added.
Free Entry or Pay Hundreds of Pounds
One Omaze competition promises the chance to win a £3.5 million ($4.7 million) home plus £250,000 in cash. While users can enter the competition for free, they also have multiple options to pay for more chances to win.
We reached out to the company for further comment on its policies and the changes resulting from the voluntary code. Rather than a direct response, we appear to have been added to their marketing mailing list and received an email with an “epic” winner’s story.
The company markets itself as a win-win for everyone. Of the money collected for the house competition, it promises to donate £1 million to charity. So, if users do not win the grand prize, they still contribute to a good cause.
Critics argue that the amount going to charity is a fraction of the money, and that if people really wanted to donate, they should do so directly.
“Omaze isn’t a scam. It’s more depressing than that,” wrote a critical Substack back in 2023. The depressing element comes from “the implication that we need an incentive to act charitably, to act kindly, to help people, animals, the planet.”
Harm Monitoring Insufficient, Claims Addict
Others have also criticized the lack of protection against users who compulsively play the giveaways.
The BBC detailed the case of Lisa, a confessed prize draw addict who racked up thousands in debt from playing the competitions.
“You win £20 credit and £30 instant win prizes, and it keeps you going and feeling, ‘Oh, this is fun.’ It’s like when you play a slot machine,” she said.
She admitted to putting “everything” she had into her addiction in much the same way as gambling addicts have reported.
“It looks like a real grey area that’s being exploited,” said Dr. Matt Gaskell, a consultant at the NHS Northern Gambling Service.
“It’s becoming something that more and more staff are mentioning. That’s why we think there needs to be tougher laws and regulations,” he added.
Similar calls have been echoed for the gambling industry, with companies accused of deliberately encouraging problem gambling and failing to protect players.
The UK government has stated that if this voluntary self-regulation fails to reduce harm, it will move toward formal legislation to bring the sector under the Gambling Act.
