Where competitions sit in UK law
The Gambling Act 2005 treats an arrangement where people pay to enter and prizes are allocated wholly by chance as a lottery, which needs a licence. A prize competition is different. When winning depends on skill, judgement or knowledge to the level the Act requires, or when people can enter free with the same chance of winning, the competition sits outside gambling law.
That is why most UK competition websites use one or both of two features, a skill question and a free entry route.
The skill question
Section 14 of the Act sets the test. The skill, judgement or knowledge element needs to be enough to prevent a significant proportion of people from entering or from receiving a prize. A question almost everyone answers correctly is unlikely to meet it.
- Every entry should answer the question, with a wrong answer path that genuinely loses the entry
- Answers should be logged per entry so you can show how the question worked
- Your terms should explain how wrong answers are handled
The free entry route
A free entry route lets people enter without paying, usually by post, with the same chance of winning as a paid entry. Schedule 2 of the Act deals with when a free alternative means payment is not required to take part. The route needs to be real, clearly explained in your terms and easy to find on the competition page.
The 2025 voluntary code for prize draw operators
On 20 November 2025 the government launched a voluntary code of good practice for prize draw operators, with more than 20 operators agreeing to sign up. Signatories commit to:
- A £250 monthly cap on credit card entries for prize draws
- No credit card entries for instant win competitions
- Free entry routes that are well publicised and accessible to all
- Measures to identify and reduce harm, including signposting to support
The code is voluntary, but it is a clear signal of where the market is heading. A competition website built today should be able to cap or block credit card entries without a rebuild.
Ireland and Europe
Rules differ by country, and a format that works in the UK may need changes elsewhere. Operators selling into Ireland and Europe need entry controls by country, terms for each market and settlement in EUR. We build that into skill based competition websites and help operators expanding into Europe get the format and the payments approved together.
Taking card payments for a competition website
Mainstream processors such as Stripe restrict prize competitions, sweepstakes and raffles under their terms, so most competition operators use a specialist provider. eCom Pay works with UK and European competition websites, with next working day settlement and no rolling reserve once approved. Approved and taking payments in 24 hours* once we have your documents.
Already trading and had your account restricted? See competition website migration, where we move your site, entrants and payments across with your competitions still running. Or read about the payment gateway for competition websites on eCom Pay.
This guide is general information, not legal advice. Take advice from a solicitor on your own competition format before launch. *Approval time depends on how quickly we receive your documents.