UK Prize Competition Glossary
Plain-English definitions of the UK prize competition, raffle and prize draw terminology used by operators, lawyers, payment processors and the Gambling Commission. Each entry links to the deeper Nera Marketing guide on the topic.
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Legal & Compliance
Mechanics
Operations & Compliance
Legal & Compliance
Prize Competition
A competition that requires a genuine element of skill, knowledge or judgement to enter, distinguishing it from a lottery under the UK Gambling Act 2005. Properly structured prize competitions sit outside gambling regulation and do not require a gambling licence.
Prize Draw vs Raffle vs Lottery
A prize draw allocates winners by random chance with no purchase required to enter the free route. A raffle is a small-scale draw typically run for a single event, usually classified as a society lottery under the Gambling Act. A lottery is a legally distinct category requiring a Gambling Commission licence.
Skill Question
A genuine knowledge-based question used to lawfully convert a prize draw into a prize competition under the Gambling Act 2005. The question must require actual skill, not random guessing, and must materially restrict the pool of qualifying entrants.
Free Entry Route
A no-purchase-required entry method that competition operators must offer to qualify as a lawful prize competition under UK law. The free route must be genuinely equivalent to paid entry in chance of winning.
No Purchase Necessary
The promotional marketing principle, codified in the Gambling Act, that requires UK prize competitions to allow free entry. Failing to provide a no-purchase route reclassifies the competition as a lottery, requiring a Gambling Commission licence.
DCMS Voluntary Code
The Code of Conduct for online prize draw and competition operators in the UK, launched by DCMS in May 2026 in response to the 2024 market study. Signatories commit to age verification, transparent rules, responsible-play measures and timely winner notification.
Gambling Act 2005
The primary UK legislation that distinguishes lotteries (regulated) from prize competitions (exempt when structured correctly). Section 14 specifically governs the prize-competition exemption used by online operators.
ASA / CAP Code
The Advertising Standards Authority’s UK Code of Non-broadcast Advertising and Direct & Promotional Marketing, which governs how prize competitions can be advertised. CAP Code rule 8 specifically covers prize promotions.
Mechanics
Instant Win
A competition mechanic where some prizes are revealed and won immediately upon entry, alongside a headline draw at a scheduled time. Built into platforms via prize-pool logic and verifiable randomisation.
Live Draw
A scheduled draw broadcast live, typically on Facebook Live or YouTube, where the winner is selected publicly. Used to build trust and engagement. Meta’s Live Streaming policies must be followed to avoid account restrictions.
Random Draw
A draw where the winner is selected by a verifiable randomisation method. The Gambling Commission expects randomisation to be auditable and cryptographically defensible for Voluntary Code signatories.
Multi-Entry Cap
A platform-enforced ticket purchase limit per user per competition. Required by the DCMS Voluntary Code to protect against excessive spend and meet responsible-play obligations.
Site Credit / Wallet System
A balance held within the platform that customers can spend on future entries. Typically funded by winnings rolled forward or refunded entries. Subject to UK consumer law and Treasury rules around stored value.
Self-Exclusion
A customer-initiated lockout from a competition platform for a defined period. Required by the DCMS Voluntary Code, with minimum exclusion windows of 6 months.
Operations & Compliance
RMG Licence (Meta)
Meta’s Real Money Gaming certification, required to legally advertise paid prize competitions on Facebook and Instagram. Issued via Meta’s RMG approval process and requires proof of UK Gambling Act compliance.
Cashflows Merchant
A UK payment processor that, unlike Stripe or PayPal, accepts prize competition merchants. Cashflows underwrites the higher chargeback risk and supports the regulatory category.
Age Verification (UK)
The DCMS Voluntary Code requirement that operators verify entrants are 18 or over before allowing competition participation. Implementations range from age-gate forms to third-party identity tools.
Legal Opinion Letter
A document from a UK competition lawyer confirming that a specific competition mechanic falls outside the Gambling Act and meets the prize-competition exemption. Often required by payment processors before approving merchant accounts.
Marketing
Meta Ad Account Ban
The permanent restriction Meta places on advertiser accounts that run paid competition ads without RMG approval. Reversal is difficult and typically requires a new business entity.
Cost Per Purchase (CPP)
The cost of acquiring a single competition ticket sale via paid advertising. Industry benchmark for established UK competition operators is between £1.50 and £4.
Conversion Rate (Competition Websites)
The percentage of unique visitors who become paying entrants on a competition site. UK industry typical: 2-6% on warm traffic, 0.5-2% on cold paid traffic.
Abandonment Rate (Competition Checkout)
The percentage of users who start a competition entry but leave before completing payment. Industry typical 60-75%; well-built competition platforms reduce this to 35-50% through frictionless flow.
