UK analysis of prize draws and competitions signals regulatory changes on the horizon
Published on 17th July 2025
Clear terms, free entry routes and full disclosure of winning chances will help operator compliance with consumer law
A London Economics report on the prize draw and competitions (PDCs) market for the Department of Media, Culture and Sport (DCMS) has highlighted some common issues along with suggestions for reform for an industry undergoing rapid growth in the UK.
The analysis published in late June looks to provide a better understanding of the burgeoning PDCs market. The DCMS commissioned London Economics to undertake the report in August 2023 amid a lack of research into the sector as it has emerged in recent years.
What are PDCs?
PDCs allow customers to purchase tickets in order for the chance of receiving a prize. Prizes under PDCs are allocated to entrants (at least partly) by chance.
PDCs are not regulated under the Gambling Act 2005. They intentionally do not satisfy the definition of a lottery (payment to enter and prizes allocated to a class by a process that relies wholly on chance). By taking an element of the lotteries definition out, PDCs are able to swerve being defined as lotteries either through offering a free entry route (in prize draws) or by incorporating a skill element (in prize competitions).
The PDC industry is substantial. It is estimated that 14% of the adult UK population spent a total of £1.3 billion in a year on PDCs, at an average of slightly over £3 per ticket. For comparison, 44% of the adult UK population spend approximately £8.2 billion annually on the National Lottery.
PDCs are seen as a competitive threat to the lottery industry, which is heavily regulated and required to donate a significant portion of proceeds to good causes.
Current PDC issues
The London Economics research highlights problems with PDCs, including transparency, gambling harm and consumer harm.
A review of the market found that operators regularly do not provide rules of play or chances of winning, do not give enough prominence to free entry routes and do not give enough transparency to distinguish properly between the main draw and any instant win products.
In terms of age restriction, the vast majority of PDC sites rely on self-certification as a way of confirming users' ages.
The typical PDC player spends roughly £175 a year on doing so, with PDC players being significantly more likely to experience gambling harm than both the general population and a typical person who engages in other gambling activities. Charities have claimed that PDCs can be a stepping stone to other gambling activities.
Regulatory solutions
The report suggests three possible changes to the regulatory landscape to help address the issues identified: changes to gambling regulation, greater enforcement of consumer protection rules and a voluntary code of conduct.
It is suggested that PDCs are brought under the regulatory oversight of the Gambling Commission, with a regulatory definition of PDCs being introduced. This would mean that operators would need to be licensed and that all gambling requirements – for example, robust age-gating and safer gambling protections – would apply to PDCs.
Another option is to implement greater enforcement of consumer protection rules. It is suggested that a sector compliance review could be conducted by, for example, the Advertising Standards Agency along with the Gambling Commission. This would not only ensure greater transparency among PDC promotional assets and terms but would also tackle rogue traders, who are prevalent in the sector.
Finally, a voluntary code is proposed. This could include provisions around, for example, minimum charitable donations, free entry route disclosure and caps on ticket prices or prizes. While any voluntary code would not be legally binding, it would be much quicker to implement compared to binding regulatory change.
Osborne Clarke comment
PDCs have a clear resemblance to gambling by virtue of the fact that there is consumer excitement of potentially winning a prize. The research shows that PDC players are at a greater risk of gambling-related harm.
This, along with the inconsistent disclosure of (and often opaque nature of) promotional assets and terms, puts a clear target on PDCs in terms of regulatory action or reform.
In anticipation of this, now would appear to be the time to ensure that any PDCs comply with consumer law by ensuring that they have clear terms, prominent free entry routes (if applicable) and full disclosure of customers' chances of winning a prize.
