Pay to enter competitions – are they gambling?
We’ve all seen ‘win a house’ competitions in the news – but lately there’s been a worrying increase in the number of companies hosting ‘pay to enter’ competitions to win prizes ranging from toys to sports cars.
Websites like Elite Competitions and WishClix give us the chance to buy one or more tickets to win prizes – ticket sales are limited – so for example a PS4 might be offered with 250 tickets available at £2 each. But a PS4 only costs £230, so the host will make a profit of £270. Easy money!
In some cases the website will advertise that a percentage of ticket sales will go to charity – but the terms and conditions reveal that this is only a tiny percentage of the revenue, and usually the number of tickets sold is increased to cover these charitable donations.
These online ‘raffles’ can be expensive, addictive, and despite the advertising, they don’t offer great odds of winning at all.
Why aren’t they classed as gambling?
Let’s look at the difference between a lottery, a raffle and a competition.
Lotteries are strictly regulated in the UK. A licence is required to run one, and is only available to local authorities or non-commercial societies.
A raffle is a lottery that’s run at a non-profit event – tickets are only sold at the event and winners are announced at the event. No licence is required and they are exempt from regulation.
But if an element of skill is added to a lottery/raffle, it becomes a competition, and is no longer regulated under The Gambling Act. If more than one person gets the answer to the competition correct, all correct entries will go into a draw and the winner is chosen at random. The element of skill can be as simple as answering a multiple choice question – the example below from Raffall.com shows how ridiculous this is!
The element of skill may be more interesting – BOTB and BNGET use spot-the-ball, and new website Swiss500 asks entrants to estimate how many cogs are inside a cube. In these cases, the closest answer wins.
Free entry route
Some ‘pay to enter’ competition websites do offer a free entry route. and it’s worth checking the T&Cs or FAQs for this – a quick way is to visit the T&Cs page and do a search for the word ‘free’. The free entry route is usually to send an entry by post – the Gambling Commission considers that the cost of a stamp isn’t considered ‘payment’ to enter, so it’s classed as a ‘free entry’ alternative to buying a ticket or a premium rate phone call. Some websites get very few people buying tickets for the draws, so it can be worth your while sending a few postal entries!
You’ll find details of a postal ‘free’ entry route for most of the expensive text competitions advertised on ITV – see my post How to enter ITV competitions for free.
You’ll also find an online free entry option for the amazing prizes listed on the Omaze wbsite – see my post How to enter Omaze prize draws for free for more about that!
Entries submitted by the ‘free’ route must be treated in the same way as paid entries and all entries will be combined before the winner is drawn.
Online raffles
Many people run raffles on Facebook pages, or in groups – but it’s a criminal offence to run a pay-to-enter prize draw online with no element of skill or free entry route, and most of these are shut down fairly quickly.
Dragon’s Den feature
Below is a recent Dragon’s Den episode where Elite Competitions pitched, and were criticised by the Dragons as encouraging vulnerable people to spend money they can’t afford. Interestingly, Elite do have a free postal entry route in their T&Cs.
Personally, I’m not a fan of this type of competition and I wish the Gambling Commission would take action on the ones with a ridiculously simple question. I do pay to enter prize draws occasionally, but that will generally be charity raffle tickets and occasionally I text in for the Heart ‘Make Some Noise’ charity competitions. But you certainly won’t find me paying £5 for a 1-in-100 chance to win a pair of £250 headphones!
I like to promote comping as a free alternative to gambling, lottery tickets or bingo – but if you are happy to pay to enter a competition, then I recommend on-pack or ‘receipt necessary’ promotions – then you’re getting a product too, and usually a much better chance of winning than in an online raffle! You can find lots on my Compers Shopping List
What’s your opinion on ‘pay to enter’ competitions – do you take part, or avoid at all costs?
To find out more about lotteries and competitions, visit the Gambling Commission – Fundraising and promotions page.
…on websites like http://www.omaze.com where usually 60% of the ticket cost goes to charity…” I dont actually think this is correct at least for the big promotions – quote from their page
“….When you donate for the chance to win an experience with a non-celebrity prize (like a car, vacation, or cash), 15% of your donation is guaranteed to go to the identified nonprofit beneficiary,…” “…..Typically between 65-75%, on average, is used to pay for experience costs, such as Prize costs, advertising and content creation…”…this would seem to leave 15% or so as pure profit to Omaze (the costs having been paid in the 65-75%) – but happy to be corrected
Thanks for flagging this up James! I wrote this post several years ago so the information was correct at the time (when Omaze had not long started!)
I’ve recently seen alot of these raffles sites on Facebook. And I’ve scarily got addicted. I desperately want a ps5 there is one site that are good but this week are selling tickets for a ps5 but also doing a mini draw where there will be 10 winners of 50 tickets each into the ps5 draw. This makes it unfair on others that can’t afford to buy that many tickets
I have noticed that the free postal entry route offered by a lot of these competition sites are often restricted to only one entry, per person, per competition, and yet others like “7 Days Performance” let you enter multiple times. Are there any rules regulating the number of postal entries that should be available. I have heard that Facebook have a rule where a single entry is not allowed, but I cant seem to find any info on Facebook regarding this.
Thx. Harry.
Very informative info! Thx for sharing.
I’ve been keeping a close eye on the explosion in car competitions over the past few months, these all run on the basis that they have a free entry (interestingly this should mean a quiz/question isn’t required, but most seem to have one anyway), which of course is via postcard.
Many companies are new and only seem to have one car on offer and ever moving end dates (and eventual ‘get out clause’ of a prize equal to 70% of ticket sales), but a few companies are really well established and give away 5 or more cars every single week with guaranteed end dates. I’ve been entering via post with the well established companies for about a month now, it’s shocking how many postal entries simply aren’t processed. Entry lists are typically published online (or ticket numbers added to your account) so it’s easy to check. Some of these competitions even have T&Cs where it impossible to get a free entry in (i.e. competition runs Sunday to Sunday but they only process mail on a Monday) or have very short entry windows where a postal entry is extremely unlikely to make it in.
I’ve been tracking mine, I currently have a list of 20 (out of 45) that have not been processed despite being sent in well before the closing date. Some will even process the low cost entries (i.e. £3 entry) but ignore those for the more expensive ones (i.e. £10), with alarming consistency. Commonly entry tickets are priced quite high (£10) with a relatively low number of entries (i.e. max 2000), giving pretty good odds, but clearly these companies simply wouldn’t be viable if everyone entered by post, which of course is a risk they should be aware of when setting these up.
The rules are pretty clear, they must have a free entry route OR an element of skill that eliminates a significant number of entries. If they aren’t processing postal entries and only asking ‘what is 2+2?’ then technically they are lotteries.
On elite competitions you no longer have to answer a question so how does that work?
They’ve changed from competitions (with the element of skill, no free entry route available) to being a ‘free prize draw with a paid entry route’! So no question is required. It’s a puzzling system.
Are you a supporter of OmazeUSA and if so; have you yourself entered their Win a House or £1.Million CASH Competition? Were you aware there is a OmazeUK now and they currently have a Win a £1.Million House as Prize to which I have entered both the USA & UK Win a Prize Home. USA closes their prize home comp Today 29/6/20. UK closes on Nov 19th. Although I’ve entered both of their Win a Home Prize Comps. Most of my entries have been in the Win a UK Prize Home Comp.
If we win; we’d sell and buy this riverfront property we currently Rent.✅
Yes! I’ve enterd the UK win a house one, and several of the US free entry routes too! I have a blog post about the Omaze free entry route – https://superlucky.me/how-to-enter-omaze-prize-draws-for-free/ – good luck Sandy!
I found this. Omaze spend only 15% to charity.A $10 contribution for the chance to win a prize-based experience (like a car, vacation or tuition) breaks down as follows: $1.50 is donated to charity; $7 typically goes to sourcing and shipping the prize, covering the winner’s taxes, marketing the experience, and processing credit card fees; and $1.50 goes to Omaze.
Thanks for this Di… answered a lot of questions I’ve always wondered about 🙂 I’m always wary of the “pay to enter” comps as there seem to be so many around …
I regularly enter these Online Raffles & recently Won a minor prize in OmazeUSA
Raffolux All £PAID Entries.
OmazeUK House Comp I Use a combo of their “Free Entry”+£PAID
OmazeUSA I enter using their “Free Entry”. Although did a few $Paid entries
In 2020 I WON a minor prize of 250 free tickets. This was won with a “Free Entry”
Dream Vehicle Giveaways I only enter once monthly in thei£1,K CASH giveaway for a £3.00 per ticket Entry. 600. Tickets Sold in each draw.
2️⃣ Entries in Postcode Lottery each month. Hubby has 1️⃣ & I hold 1️⃣ ENTRY
Free Daily Online Lottery (2 draws Monday’s):
https//www.lottery.co.uk/free-lottery
Gov. LOTTERIES with 1️⃣ Line in EACH of the following in each of their Draws.
SET FOR LIFE
THUNDERBALL
Euromillions & Lotto Occasionally only.
Spot The Ball Competitions should be banned and avoided at all costs. As their too easily rigged by the host at the final drawing so that no one was on or near that spot. I’ve seen too many Spot The Ball competitions that end under questionable scrutiny? These have all been related to WIN a PROPERTY comp.
The Gambling Act terms around “free” prize draws desperately needs updating to reflect modern technologies – “free entry” method should should be via a “normal” and “convenient” means of communication such as a standard web page, telephone call or text message.
It’s ridiculous that these companies like ITV get away with charging £2 per entry & then encouraging multiple more £2 entries all because they know “postal entry” is so inconvenient, expensive (and also causes unnecessary damage to the environment!). The result is that these so called “free” prize draws are causing many people to gamble more money than they do on a lottery ticket…all because the alternative “free” postal means of entry is so inconvenient (what would you do if given the choice; send an sms OR go to the post office, buy a stamp and postcard and send a letter? What if you’re house-bound?) AND, because this “free” method of entry is significantly more expensive than it used to be in 2005 when mobile phone calls, sms and internet cost more… whilst a 2nd class stamp was only 22p.
It’s time this classification of what a “free entry method” is is updated to be more convenient and fair for the population. The cost of a stamp is now significantly more expensive, as is the inconvenience of purchasing one (and a postcard!) compared to modern-day communication that most of the population have access to, allowing them to communicate/enter in a few seconds and costs next-to-nothing.
I don’t know much about the law but surely there would be a good amount of support by compers etc for this on something like https://petition.parliament.uk ?
Rant over!
This is a great idea. I would support this.
End of the day I understand however , you’re being a bit of a busy bee . I have paid for a few entries and actually won a scooter which my son now has . Surely if you want want to pay to enter then don’t enter ?
Totally agree with you. Been watching quiet a few of these Prize Home Comps and many are very questionable about their even being a legit winner. Only 1 homes has actually become the prize! I personally know the hosts of 1 of these Win a Home Comps that was valued at £3.5.Million and the draw was very suspicious as being a fraud. I know for a fact (as I know them) that they got to keep their their home and went onto List it onto the market just 2 weeks after draw was announced and YouTube of what appeared to be a deliberate setup (fraud) which wasn’t until 2 months after draw. Watching and socialising with this couple throughout comp bad beyond its ending announcement; I would bet my life on it that this couple kept all the funds (£25.00 per ticket and they claimed they only sold 50,000 when I know their actually sold 55,000 tickets) plus they got to keep their home to which went on to be sold on the market too. I watched their lifestyle with no jobs or plans to wk.
However, they made a point of covering themself with a train incase it was every contested. So they probably gifted a close friend (not us) some cash to cover their track as having given some cash away. They needed to sell 200,000 to Win the
He’s simply advertising botb. Where the odds are much more higher than these normal competition websites. There are millions of pixels in each pictures and they make it sound so easy. Atleast with the other competition websites there are set number of tickets. So odds are much lower and all draws are done transparently through Google random number generator and that too live. The author needs to come up with a different plot to advertise botb.
Hi Carol,
By the sounds of it you have never run a business and this is exactly what these competition providers are.
Without paid entries these competitions just simply wont exist, thousands of jobs would be lost and you wont have any competitions to enter for free postal entry or not.
Use some common sense.
Well said Sean,
I couldn’t agree with you more!
I’m glad someone else in here has some common sense.
It looks like most of the commenters in here have no clue about how business works. They expect to enter competitions with expensive prizes for free, and seem to think that’s somehow fair?
And the point you made was bang on. How long would it be before all these bsuinesses would go bust because they had to offer their huge prizes for free?
If people don’t want to pay to enter a competition or prize draw, then don’t bother!
Millions of people seem happy enough to pay to enter the lottery every week in the hope of winning the millions, but I don’t hear them complaining do you? If the ticxkets were free there would be no millions to win!
Cheers!
What a load of nonsense!
How long do you think the competitions and prize draws would last if it was that easy to enter for free? If it was simply a case of sending a text or ticking a box on a website, pretty much everyone would just enter for free and there would be no paid entries.
And if there were no paid entries, that would mean there would be no more companies providing the opportunity for people to win prizes?
You want the prizes for free and with no effort involved whatsoever on your part and you think that is somehoe fair on the others who pay to enter?
Good grief, where do you get your logic from?
I’m not sure if you’re aware, but pretty much ALL brands give away prizes for free, and of course it’s easy to enter. In many cases by ticking a box on a website, or liking a social media post. NO money spent at all.
The only reason ‘raffle’ sites exist is because of the loophole in gambling law. The Lottery is properly regulated by law, and raffle websites aren’t.
This is really interesting Di, because I have been entering, and hosting, one or two raffles on Raffall.com
I can’t honestly remember now, how I happened upon them. but it was early in January.
But I agree with your analysis, and so I will run down my involvement once they’ve concluded.