DCMS Introduces Voluntary Code for £1.3bn Prize Draw Sector

Over the last five years, the UK’s online prize draw and competition sector has grown to a £1.3bn annual market with more than 7.4 million occasional or active players and over 400 operators. The model relies on exemptions in the Gambling Act 2005, which allow these businesses to operate as skill-based competitions with a free entry route, keeping them outside the full gambling-regulation regime.

Typical features include trivial skill questions designed to avoid gambling classification, a free postal entry route, high volumes of paid entries compared to low free-entry volumes, and heavy use of social media and influencer-led marketing. The consumer proposition is clear; low entry prices, aspirational prizes, and visible winner selection, sometimes livestreamed to build trust.

Regulatory Position

Prize draws remain exempt from the Gambling Act if they involve genuine skill, or provide a genuinely accessible free-entry route with equal winning chances. As a result, operators are not subject to anti-money-laundering controls, mandatory age verification, responsible-gambling obligations or Gambling Commission oversight. That absence of regulatory friction has undoubtedly contributed to the sector’s rapid growth and innovation.

But it has also created gaps that are becoming harder to overlook.

London Economics / DCMS Market Study

In June 2025, DCMS published a study by London Economics assessing consumer risks and regulatory vulnerabilities across the sector. The findings were difficult for policymakers to ignore.

Two-thirds of frequent participants exhibited behaviours typically associated with gambling harm. Some reported overspending, chasing losses and anxiety related to outcomes. Support organisations flagged prize-draw-linked financial distress. Operators were found to be inconsistent in their disclosure of odds, clarity of draw mechanics, visibility of free-entry routes and accuracy of marketing practices. In some cases, it was unclear whether free entries genuinely had equal winning chances.

The combination of rapid market growth and uneven standards created a picture of a sector that is vibrant but vulnerable — and increasingly likely to attract political intervention.

When the findings were published, DCMS announced its intention to introduce a Voluntary Code of Good Practice for Prize Draw Operators.

The Voluntary Code

The Voluntary Code was published 21 November 2025. It focuses on player protection, transparency and operator accountability. Although explicitly labelled “voluntary,” the Code is the Government’s first formal attempt to create structure in a market that has been largely self-regulated until now. Importantly, statutory licensing remains a likely outcome if voluntary compliance is inadequate.

Operators must be fully compliant by 20 May 2026.

The Code raises expectations across multiple touchpoints. Free entry routes must be visible and genuinely usable. Terms and conditions must be clear and accessible. Odds and draw mechanics must not be ambiguous or buried in dense legal text. Marketing must avoid exaggeration, urgency pressure or messaging that creates unrealistic expectations. Transparency moves from being a competitive advantage to a baseline requirement.

The Code also marks a shift in how Government views the sector. Until now, prize draws were largely treated as a niche commercial product. The new tone suggests a recognition that a market of this size carries not only entertainment value but consumer protection risks, particularly for those already susceptible to gambling-like behaviours.

Where the Sector Stands Now

The arrival of the Voluntary Code is not an endpoint. It is the beginning of a transition period during which operators will need to demonstrate that they can meet higher expectations without compromising the creativity and accessibility that made the sector popular.

Some operators already appear well aligned with the new requirements, particularly those who have invested in clear processes, transparent winner selection and responsible communication. Others will have far more work to do, especially those relying on opaque terms, questionable marketing or free-entry routes that appear more symbolic than practical.

The central challenge for the sector is cohesion. With more than 400 operators ranging from small startups to multi-million-pound businesses, consistency is difficult. Without a unified trade association or coordinated industry standards, enforcement of the Code’s principles becomes fragmented. If the industry cannot create that cohesion voluntarily, Government may conclude that a licensing regime is the only way to achieve it.

Looking Ahead

Between now and May 2026, operators need to assess their processes, documentation and communications to ensure alignment with the Code. This may include revisiting how free entry processes are presented, improving clarity around odds and entry volumes, and adopting independent testing or draw verification to build trust. It may also mean rethinking marketing strategies, especially where urgency, scarcity or influencer-led promotions may raise concerns.

The sector remains innovative, popular and culturally relevant. The challenge now is to balance that creativity with responsible practice. are aligned with the expectations set out in the Code, the prize-draw model can continue to thrive within a proportionate regulatory framework. If not, the sector may find that the freedom it has long relied upon becomes significantly more restricted.

The next six months will give the clearest indication yet of which direction the industry intends to take.