British Gambling Commission clarifies position on free draws

The regulator has clarified its role after an increase in the number of enquiries from the public.

UK.- Britain’s Gambling Commission has clarified its position regarding the regulatory oversight of so-called free draws and prize competitions as the result of an increase in the number of enquiries from the public.

The regulator clarified that such competitions are not regulated under Britain’s 2005 Gambling Act, and as such it does not provide oversight. 

The Gambling Commission warned the public that companies behind such draws and competitions “may not be subject to the same oversight as regulated providers of gambling products and may not offer the same level of consumer protection against gambling-related harm”.

It also warned that there may be no independent oversight to vouch for claims that proceeds go to any good causes. 

However, the regulator noted that the legislation does provide a distinction about how free draws and prize competitions must be structured to avoid classification as a lottery service. It warned that organisers who do not meet the requirements could be operating an illegal lottery, in which case it would intervene and take action.

The regulator said it had noted an increase in the number of enquiries it received about “win a house” or “win a cash prize” competitions.

Current legislation allows free draws to be organised for commercial and private gain as long as organisers provide clear rules about how to enter for free entry and disclose any requirements needed to compete for prizes.  

The UK government, which is currently reviewing the 2005 Gambling Act, has been urged to regulate prize draws in the same way as gambling. Australian lottery firm Jumbo Interactive joined calls for regulation after research showed that £117m worth of entries were paid for on credit cards in the last year.

Using credit cards to gamble was banned in April 2020, but a loophole in regulation means there are no restrictions on commercial prize draw or prize competition companies.