UK prize draw compliance
Start with the model you are actually running.
Prize draw. Free draw. Prize competition. Instant win. Lottery. Those words are often used interchangeably in everyday conversation. Legally and operationally, they are not interchangeable.
Before worrying about software, ticket prices or marketing, an operator needs to understand what kind of promotion it is actually running.
Get the structure right before you configure the platform.
Chance or skill
The first distinction
Is the result determined by chance or skill? This is the starting point.
The Gambling Commission distinguishes between free draws and prize competitions. A prize competition is one where the outcome depends on skill, judgement or knowledge. A free draw is structured around free participation, either because every entry is free or because a genuinely free route exists alongside a paid route.
Neither requires a Gambling Commission lottery licence when structured so that it satisfies the relevant requirements of the Gambling Act 2005. If those requirements are not met, the promotion may instead amount to an unlawful lottery.
Calling something a competition does not make it one.
Free draws
Free draws: paid entry alongside free entry
A free draw can offer both a paid entry route and a free entry route, but the free route has to be genuine. Current Gambling Commission guidance says that where paid and free routes operate together:
- people must be able to choose the free route
- it must not be more expensive than the paid route
- it must not be less convenient than the paid route
- it must be available at the normal rate
- it must be promoted and displayed at the same level as the paid route
- the prize allocation system must not distinguish between paid and free entries
Free in the terms. Visible in the journey. Equal in the draw.
Normal rate
What does free mean?
Free does not necessarily mean zero communication cost. The Gambling Commission describes first or second class post as a free method for these purposes because it uses the normal rate of communication. Special or premium delivery methods do not qualify in the same way. Where another communication method is used, it cannot impose an additional payment above the normal cost of using that method.
The useful point for an operator: the free route needs to function as a real alternative, not a technical loophole nobody could reasonably use.
Equal treatment
Same prize system
Free entries do not belong in a second draw. Gambling Commission guidance says that the system allocating prizes should not distinguish between entries coming through the paid route and those coming through the free route.
Live Beaver's free entry functionality puts accepted free entries into the same underlying ticket pool as paid entries.
PAID ENTRY --.
+--> ELIGIBLE ENTRY POOL --> DRAW
FREE ENTRY --'
Different route in. Same pool at the end.
Skill
Prize competitions: skill needs to do some work
A genuine prize competition relies on skill, judgement or knowledge. According to the Gambling Commission, the required test should either discourage people from entering because it is sufficiently difficult, or prevent a proportion of those who enter from winning a prize.
The Commission also warns that ordinary multiple choice questions, or questions that allow another attempt after a wrong answer, will rarely meet that standard.
A question on the checkout is not automatically a legal skill test.
Beaver can enforce a configured skill question. It cannot turn a weak question into a strong legal proposition. More on skill questions.
Lotteries
Lotteries: why the distinction matters
A lottery involves payment to participate, allocation of prizes and allocation wholly by chance. Commercial lotteries cannot simply be run for private gain outside the relevant regulatory framework.
If a supposed free draw or prize competition fails to satisfy the relevant exemption requirements, the organiser may instead be operating an illegal lottery.
If you are unsure which model you are operating, get legal advice before launch.
Regulator
The Gambling Commission's role
It does not approve prize competitions for you. The Gambling Commission says it does not approve free draws or prize competitions and does not help businesses design them. Operators are responsible for structuring their promotions appropriately.
The Commission can act where it believes something presented as a free draw or prize competition is actually being operated as an illegal lottery.
No licence required does not mean no rules apply.
Good practice
The DCMS Code
Law is only part of the current landscape. The Department for Culture, Media and Sport published its Voluntary Code of Good Practice for Prize Draw Operators on 20 November 2025.
The Code covers relevant Great Britain prize draws using both paid and free entry routes. It focuses on player protection, transparency and accountability. It is not legislation and does not replace existing consumer or advertising law. Signatories were required to implement it by 20 May 2026. The government page was most recently updated on 1 September 2026.
Advertising
Advertising
The promotion does not stop being regulated when it reaches Instagram. Prize draws and competitions are also subject to promotional marketing rules. CAP guidance covers areas such as fair administration, clear terms, significant conditions, closing dates, prize descriptions, winner selection, instant win mechanisms and promotional advertising.
CAP also advises promoters to seek legal advice where needed to ensure prize promotions do not amount to unlawful lotteries.
The platform can run the promotion. The advert still needs to tell the truth.
Big prizes
High value prizes
Big prizes create big expectations. Current CAP guidance highlights potential issues around high value promotions, particularly where operators change closing dates, change material terms, withhold the advertised prize, replace it with a materially lower value alternative or omit important conditions from advertising.
This is another reason Beaver's competition lifecycle and fulfilment evidence matter operationally. But the software does not make a misleading advert compliant.
Instant wins
Instant wins
Immediate result. Different operational questions. CAP defines instant win promotions as promotions where the participant receives or knows the result immediately. Its current guidance says instant win tickets, tokens or numbers should be awarded fairly and randomly, with appropriate verification around prize distribution.
The DCMS Code adds further good practice considerations for relevant prize draw operators, including player protection and credit card controls.
Live Beaver's instant win integrity model commits the allocation before sales open.
Software
What software can do
Turn operating decisions into behaviour. Once an operator has established the model it intends to run, software can help enforce parts of that operating design. Beaver currently provides or contains functionality around:
- free entry handling
- skill question validation
- published odds
- spend limits
- take a break
- self exclusion
- marketing suppression
- draw auditability
- prize fulfilment
- audit trails
- dated compliance evidence
Software is good at enforcing rules. Deciding which rules apply still comes first.
Limits
What software cannot do
There is no "make compliant" button. Beaver cannot decide:
- which legal model is right for your business
- whether your legal interpretation is correct
- whether your advertising complies with every applicable rule
- whether every prize description is accurate
- whether a particular skill question satisfies the statutory test
- whether your wider business complies with consumer, privacy or tax law
The software can enforce the configuration. It cannot replace judgement.
Questions
Asked and answered
Do I need a Gambling Commission licence to run a prize draw?
A properly structured free draw or genuine prize competition does not require a Gambling Commission lottery licence, but it must meet the relevant requirements. If it does not, it may amount to an unlawful lottery.
Can I charge for entries if I also offer a free route?
A free draw can have both paid and free entry routes provided the free route satisfies the relevant requirements, including visibility, cost, convenience and equal treatment in prize allocation.
Can I use a multiple choice question instead?
A question does not automatically make something a genuine prize competition. The Gambling Commission says simple multiple choice questions rarely satisfy the required skill threshold.
Is the DCMS Code legally binding?
The Code is voluntary. DCMS explicitly states that it is not legislation and does not replace existing consumer or advertising law.
Does Beaver provide legal advice?
No. Beaver provides software and information about how its controls operate. Operators should seek appropriate professional advice where they need a legal interpretation.
Primary sources
Where this page gets its facts
- Gambling Commission: Free draws and prize competitions(opens in a new tab)Free routes, skill tests and the lottery distinction.
- Gambling Act 2005, Schedule 2(opens in a new tab)What counts as payment to enter a lottery, including the free entry route.
- Gambling Act 2005, section 339(opens in a new tab)Prize competitions.
- DCMS: Voluntary Code of Good Practice for Prize Draw Operators(opens in a new tab)Published 20 November 2025, updated 1 September 2026.
- CAP Code, section 8: Promotional marketing(opens in a new tab)Rules for prize promotions and instant wins.
Checked 19 September 2026. Guidance changes; always read the current version at source.
Build on the right foundation
Understand the model. Then configure the platform.
If you need legal advice, use a lawyer. If you want to see what Beaver can enforce, talk to us.
