On 26 June 2025, the Department for Culture, Media and Sport (“DCMS”) published a research report on online prize draws and competitions market study, assessment of harm and review of potential interventions (the “Report”). London Economics, a leading specialist policy and economics consultancy, was commissioned by DCMS in August 2023 to conduct research into the prize draws and competitions (“PDCs”) industry, with the view to providing DCMS with a better understanding of the PDCs market, and to inform consideration of whether any government intervention may be required in this sector and, if so, what form that intervention could take.

Purpose and objectives of the study

It is recognised that although the PDCs industry has grown rapidly in the UK in recent years, little research into this sector has been conducted to date. PDCs are similar to lotteries in that players purchase tickets to participate and prizes are awarded at least partly based on chance. However, they differ from lotteries in (at least) one of two ways: ‘prize draws’ offer a free entry route and ‘prize competitions’ have a skill element (e.g. answering a question) meaning that prizes are not allocated entirely by chance. Due to these characteristics PDCs are not regulated under the Gambling Act 2005 (unlike lotteries), meaning that they are not subject to gambling regulatory oversight. 

The research was structured around three overarching questions: 

1. What is the size and scale of the prize draws and competitions market (both demand and supply)? (Section 2 of the Report) 
2. What evidence is there of negative consequences from these products? (Section 3 of the Report)
3. If any harm is identified, what would be the most effective and proportionate intervention? (Section 4 of the Report)

Section 3 reviews the evidence about whether there is any harm both gambling and non-gambling (consumer), arising from PDCs, and the impact that they have on the regulated lottery industry.

Section 4 focuses on the case for government intervention in the PDCs industry to address reducing the risk of gambling harm from PDCs, improving the integrity and transparency of PDCs, and protecting donations to charities. It suggests three interventions:

1. Changes to gambling regulation

The Report considers the possibility of bringing PDCs under the oversight of the Gambling Commission and the requirement for PDC operators to have a licence to operate. Doing so would mean PDC operators would be required to implement player protection and transparency obligations, including:

• Minimum age for participation
• Provision of self-exclusion mechanisms
• Safer gambling messaging and signposting to gambling harm charities
• Caps on entries and/or spend per player
• Limits on promotional offers
• Ban on accepting credit card payments
• Provision of information to consumers on how and where proceeds are used, on how prizes are allocated and the likelihood of winning a prize
• Possible limits on sizes of prizes and ticket sales

Bringing PDCs within the Gambling Commission’s remit would give the Gambling Commission an opportunity to regulate the instant win games offered by operators, and to mandate gambling duty/minimum charitable donations for PDC operators.

2. Greater enforcement of consumer protection rules

The Report offers an alternative option of pursuing more assertive enforcement of consumer protection rules, which could be an effective way to address consumer harm in the market for PDCs. Such an intervention could include the existing framework of rules for consumer protection, including the work done by consumer protection bodies such as the Advertising Standards Authority, which has previously taken action against potentially harmful advertising by PDC operators, for example in relation to the free entry route. Whilst this intervention method is expected to increase transparency in the market, it is noted that additional costs incurred by operators to comply with enforcement may be passed on to consumers in the form of increased prices or reduced quality. 

3. Voluntary code of conduct

The Report suggests that the introduction of a voluntary code of conduct for operators of PDCs could be used to set industry standards for measures used to protect players from harm. Although such a code would not legally require PDC operators to implement the kinds of player protection measures that lotteries have, it may induce them to do so, especially if the alternative is direct regulation. Of the three possible interventions, this would be the quickest and least costly to implement, and of the three, was the preferred option of the PDC industry, with many PDC operators expressing an interest in being involved in a Working Group to develop such a code. However, this intervention runs the risk of having poor take-up and/or adherence, given its voluntary status.

The Report concludes that the three interventions outlined offer different strengths and weaknesses in addressing the case for intervention and carry different practical implications and different risks of negative consequences, and notes that all these considerations should inform the government’s eventual choice of intervention(s).

We encourage stakeholders to read the full Report published by the DCMS. Please get in touch with us if you have any questions about this research report or the PDCs market.