Unregulated prize draws and competitions leading to huge debt

New research has revealed that nearly one in 10 people who have entered ‘big ticket’ prize draws and competitions, which offer luxury prizes like cars and houses, have ended up in debt as a result.

A study by Jumbo Interactive found consumers spent £653 million entering paid-entry prize draws and competitions in the last year – and a shocking £117 million of this was spent using credit cards.

Why aren’t raffle websites regulated?

Although using credit cards for gambling has been banned in the UK since 2020, these ‘raffle’ type websites are not considered to be gambling. They exploit a loophole in the law – if the promoter adds a ‘free entry’ option or introduce an element of skill (a question to answer, or a spot-the-ball challenge, for example), they are considered to be prize draws or competitions. As a result, no lottery licence is required and the Gambling Act does not apply.

Many of these ‘raffle’ type sites advertise charitable donations, and almost half of the participants said this made them more likely to take part. However, the charitable donation is usually very small, and ticket prices are hiked up to cover it.

Examples of unregulated prize draw and competition websites where you pay to enter include: BOTB, Elite Competitions, Bounty Competitions, Froghopping, Odurn, Raffolux, Daymade, Aspire Competitions, Storm Competitions, Goodlife, Gas Monkey Competitions, Click Competitions, McKinney Competitions, Opulent Competitions, Rev Comps, Better Chances, Redline Competitions, The Giveaway Guys, Top Marque, XClusive Competitions, Ticket Me, Prize Paradise, Cloverhut, Jammy… but there are many more!

McKinney Competitions offering 10 tickets for £143.70

Statistics from Jumbo Interactive’s research (conducted among a nationally representative sample of 4,000 UK adults by Opinium in October 2021):

  • 22% of adults in the UK have participated in prize draws within the past three months, spending £18.70 each on average in this time period
  • 72% of those who enter lotteries, draws or competitions think prize competitions and prize draws should be regulated in the same way as gambling

I’ve previously written about my own concerns about raffle websites in my post ‘Pay to enter competitions – are they gambling?’ but I find these statistics about credit card debt really concerning. It’s definitely time for the government to regulate pay-to-enter prize draws and competitions properly, to ensure transparency and protect consumers from going into debt.

I contacted Jumbo Interactive’s General Manager Nigel Atkinson to ask about their research. He informed me that they have already made a submission to the Government’s Department for Digital, Culture, Media & Sport (DCMS) as part of the consultation on the imminent Gambling Act review. The Lotteries Council have also been in contact with DCMS and voiced their concerns.

The Government were due to publish an outline of proposals for the Gambling Act changes this year – Covid-19 has delayed this, but hopefully we should expect it soon.

Why are ‘free entries’ not actually free?

‘Free’ entry routes for this type of prize draw or competition involve sending off your entry by post, either on a stamped postcard or in a stamped envelope. A free entry should be treated exactly like a paid entry and the instructions for sending one are usually overly complex, and hidden away within the terms and conditions. However, some raffle sites state that if the number of paid entries reaches the limit before a free entry is received in the post, that free entry will not be entered into the draw.

The Gambling Act considers a postal entry to be ‘free’ despite the cost of a second class stamp now being 68p (46p more than when the Act was last updated in 2005), and it really needs updating to reflect the true ‘free’ entry available to consumers in 2021 – which would be via email or website.

Are there limits to entries?

Most raffle websites will state a limit to the number of entries you can purchase per prize draw or competition. BTOB allow 75 entries per person for each of their Dream Car competitions. Cloverhut have capped it at a ridiculous 5,000 tickets per person, per competition!

The limit for free entries should be the same as for paid entries – as an ASA ruling from March 2021 demonstrates.

Raffle site Team HARD Racing breached the CAP Code because their prize draw limited free postal entries to just one per person, whereas paid entries were unlimited. The ASA stated: “We considered that this gave participants who had paid to enter multiple times an unfair advantage by giving them a greater chance of winning than participants who could only enter once through the free entry route. We therefore concluded that the promotion had not been conducted equitably and breached the Code.”

However, raffle sites continue to restrict the number of free entries – and I do urge you, if you see a limit of one free entry in their T&Cs, to lodge a complaint with the ASA. State that it is a breach of CAP Code 8.2 – “promoters must conduct their promotions equitably”.

What happens if all tickets aren’t sold?

It’s important to check T&Cs carefully for each prize draw or competition. Some raffle websites guarantee the prize will be won even if all available tickets are not sold. Most sites keep extending the closing date if ticket sales are slow. For bigger prizes like houses, if the tickets aren’t sold they will usually award a cash prize equivalent to around 60-70% of the ticket sales (the remainder of the money is taken by the promoter for administration and advertising costs).

You don’t need to pay to enter competitions

Entering competitions and prize draws can be a completely FREE hobby, and I feel frustrated that so many people believe the only way to win prizes is via buying tickets for raffle websites, or sending £2 text messages to ITV or Heart FM.

Here at SuperLucky I choose to share free entry prize draws and competitions – or I share purchase necessary prize promotions where you buy a product at the usual price, and then get a chance to win a prize (such as the promos on my Compers Shopping List).

In addition I share details of standard rate text competitions (costing a maximum of 15p) such as those run by Tesco – but I avoid publicising premium rate text competitions, and instead I’ll share details of a cheaper postal (or free online) entry route if it exists.

I consider gambling to be a dangerous addiction and do what I can to steer new compers away from it, by showing them alternative and fun ways to win prizes or money that are free or minimal cost!

I’m regularly contacted by raffle sites who want to pay me to promote their businesses, and I always refuse. Many of them run a free entry online prize draw to get people to sign up, then they bombard new members with emails offering deals on the tickets. It’s easy to get addicted and the spending limits are set too high.

Expensive TV & Radio prize promotions

Media companies have jumped on the bandwagon too, although their prize promotions don’t put a cap on the number of entries/tickets available, like the raffle sites do.

Global have a ‘Win Plus’ platform, with the paid entry draws tricky to distinguish from the free entry draws on the Heart and Capital competitions pages. Each entry costs £2 (with discounts for more entries – spend £10 for 15 entries). There’s an easy question or puzzle to solve as the required ‘skill’ element, rather than a free entry route. The spending limit on Win Plus is £30 per person per day.

Bauer radio stations run premium rate text entry competitions for big cash prizes (Cash Register, Make Me a Winner, etc.), but usually offer a free entry online rather than by post – I share details of these comps in my Win cash prizes in free online competitions post.

And let’s not forget ITV and Channel 5 premium rate text entry competitions, which have the free postal entry option rather than asking a skill question. There are certainly plenty of media companies taking advantage of the loophole in the law!

Enter the big ticket draws by post

Unfortunately unregulated raffle websites are popping up everywhere, with more and more companies hoping to lure consumers with low ticket prices and dubious charity partnerships.

For some new sites you actually have a decent chance of winning a prize if you send off a postal entry, as they rarely sell the full quota of tickets, so if you’re happy to spend the cost of a stamp on entering, then you could give it a go. It’s obviously better value if you send postal entries off for draws where the online ticket prices are high, and you’ll have a better chance of winning when entry numbers are very low. I recommend you set yourself a limit for your spending on stamps.

Be careful though – for most sites you will need to register with the site even to make a postal entry, and your inbox will soon be full of cheap ticket offers to try and get you to part with your money. Not all sites are genuine, either – read T&Cs and search Google for reviews before you get involved. SuperLucky readers have told me they’ve had problems with sites based in Northern Ireland acknowledging their postal entries.

Have you spent money on these pay-to enter sites, or sent off a postal entry? Have you ever won a prize? Let me know in the comments what you think about raffle websites, and if you think they should be properly regulated.

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7 Responses

  1. Anon says:

    As someone with a previous gambling addiction & registered with gampstop, these sites have set me back to square one in terms of addiction and now find myself with over £35k in credit card debt. The sites encourage it and you would think they would have the same responsibilities in relation to affordable spending but nope.
    I used to be someone that people would refer to as “same winners all the time” and honestly looking at winners lists and instant wins on comps, I dread to think how much money all of these other companies have lost.
    You get sucked in. When you win cash, it ends up right back with them and they know it. I’m devastated that I’ve been hooked and wish I had the courage to speak out about it but I just so ashamed.

  2. Swaye says:

    Avoid raffles sites, bounty competitions have what seem to be random number generator winners but winners are mostly over a certain area, aberdeenshire, moray etc only takes one number to win regardless of followers and the same locations constantly are winners, abt 90 % with a few further a field now and then, would like to see these sites regulated.

  3. Charlotte McHugh says:

    I am reading this blog after getting a bit sucked in! I won site credit on my third attempt so wrong thought these were a good thing. I’m slowly now unsubscribing to the sites as my site credit has now gone and I can see how easy it is to want to keep spending. Low ticket prices are there to tempt you – but the odds are not good. These sites definitely need more regulations in place!

    • Di says:

      Thanks for your comment Charlotte. Many of these sites contact me asking me to promote their giveaways – I respond to say I don’t promote paid raffle sites, and they reply saying ‘But this one is free to enter’ – but that’s how they get people on board, by getting them to follow their socials and join their mailing list. There’s so many great ways to enter comps for free it bugs me that so many are ripping people off by running these dodgy raffle sites!
      Hope you can get back to doing some free entry prize draws, and wish you lots of luck!

  4. Wth? says:

    Go onto Trust Pilot and read the recent negative reviews on McKinney Competitions. They confirm your previous comments that there may be problems with some Northern Ireland based competition businesses and postal entries. This company were restricting free entries using the postal route, to only one each, for a £1,000,000 competition, which is still live, closing this Sunday. They have now removed this restriction, after having been “called out on it” by several people and after having acknowledged the restriction, in their own responses to Trust Pilot reviews.

    Like, I mean, the image of a 5 year old, caught with their hands in the cookie jar and with chocolate all over their face, comes to mind….. . It would actually be hilarious, if it wasn’t so serious. Shameful, in reality .

    You’d have to think that the people running many of these businesses, should be entrusted with running nothing more than a £1 pound raffle with no more than 1 entrant…… and the only people that they should be allowed to sell the £1 ticket to, is themselves.

    Many of these company’s look to be totally shambolic outfits, who are most likely eventually headed for major catastrophe. The question is most likely not if, but when, will that happen?

  5. Pete Mc says:

    I am very concerned about a current skilled based car prize draw with free a free entry route available with only 500 tickets available and carries the price tag of £100 for per paid entry route with up to 10 entries available with the promotors claim of a high-ticket price and low tickets will give superb odds with a claim no one else offers such good odds, that of course doesn’t take a genius understand the reasons for doing this and it is most definitely not for the odds especially as in all probability with the competition ending as soon as all the tickets are sold it would be over before any free postal entries had arrived. Along with this at no point has the promotor ever mentioned or informed possible participants that there is a free route available, on the contrary in several posts he has said and the following is copied and pasted from the promotors website.

    The LINK is in the BIO people so if you can afford the RISK of £100 then GET INVOLVED
    The question was asked and now we’re doing something that’s NEVER been done by ANY other competition company
    You have a BETTER chance to WIN, LINK HERE.
    It is clear to see from the replies that a very considerable number of followers are blindly trusting some very misleading and deceitful promotional videos that have been so far posted. Even more misleading should you click on the above-mentioned link to the web page a link that clearly reads Terms and Conditions does not actually take you to the terms and conditions they can be found only by clicking another link at the bottom of the page the first link directs you to. Even more misleading under the paid entry route and skill questions, where they all put it in small print is the link to free postal entry instructions, However unlike all the others it only states postal Instruction and leaves out the all-important word free. Not only is every single promotional post regarding this competition arrogant, misleading and deceitful, a fact that can clearly be seen through the responses to them. it is treating die hard followers and customers with complete contempt and disrespect and gambling on a greater portion of them being extremely foolish. Not only this it is unfair to those that would chose the free postal route of entry due to the very low number of tickets and ending as soon as they are all sold in which I have no doubt he is aware. After only a few days more than half the tickets are and I quote him “sold” with a good many participants standing to loose up to £1000 by a thoroughly misleading promotion of the entry requirements. This draw needs to be stopped before more people mislead into parting with a lot of their hard earned money

  6. Stewart says:

    I agree 100%. I personally think these sites should be forced to show banners and links to gambling addiction help. Whenever I’ve made a comment about their legitimacy or morals the owners always get nasty in their replies.

    Here is an example https://fb.watch/eoKAoX94a6/

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