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www.gamblingcommission.gov.uk

Prize competitions and free draws are free of statutory regulatory control under the Gambling Act 2005 (the Act). Such competitions and draws can therefore be organised commercially for private benefit and profit. This contrasts with public lotteries which are the preserve of good causes, and must, unless they qualify in one of the 'exempt' categories, operate under a licence issued by the Gambling Commission (the Commission).

The Act contains provisions designed to make clear the distinction between lotteries and prize competitions and free draws. Although the Commission has no regulatory responsibilities in respect of competitions and draws, we are nonetheless expected to monitor the boundary between them and lotteries. We also have duties in respect of pursuing and prosecuting illegal gambling and will act where schemes are organised and promoted that, in our view, amount to unlicensed and therefore illegal public lotteries.

Reflecting all this, the Commission is publishing this paper which sets out our opinion of the implications of the provisions in the Act relating to lotteries, competitions and draws and in particular where the boundaries lie between the three. We do so in order that those organising competitions and draws have some guidance available on what the Commission considers is needed to avoid breaches of the Act.

In prize competitions, success depends, at least in part, on the exercise of skill, judgement or knowledge by the participants. This distinguishes them from lotteries, where either success depends wholly on chance or, in a complex lottery, the first stage relies wholly on chance. Section 14(5) of the Act addresses this distinction.

The intention of the Gambling Act Law is clear: competitions which genuinely rely on skill, judgement or knowledge are to be permitted to operate free of any regulatory control under the Act.

To be sure of staying on the right side of the Law and for there to be no ambiguity we advise using at least THREE Competition Questions to avoid your Draw being classed as a Lottery.