On November 20, the Department for Culture, Media and Sport (DCMS) released its ‘Voluntary Code of Good Practice for Prize Draw Operators’, offering guidelines for both paid and free prize competitions in the UK. While this code is a significant step towards standardizing practices in the sector, it remains voluntary and not legally binding, merely complementing existing regulations concerning consumer law, advertising, and data protection.
In June of this year, the government had promised to launch the code before year-end, a move met with mixed reactions. Some industry stakeholders, like the UK’s Lotteries Council, have consistently advocated for formal regulation of the sector. Currently, Prize Draw Competitions (PDCs) can operate without a license under the Gambling Act 2005, as long as they provide a free entry option. The decision to keep PDCs unregulated has sparked debate, with some suggesting that more oversight is necessary to ensure fairness and transparency.
Initially, there was speculation that the Gambling Commission might manage the code’s implementation. However, the DCMS clarified their own responsibility for overseeing it, including conducting periodic reviews to assess its effectiveness. Operators who wish to align with the code must implement its guidelines within six months of publication, setting a deadline of May 20 next year for compliance.
The code underscores the importance of operators acting in good faith regarding its measures. It extends beyond just the operators to include related parties such as web developers, urging them to promote adherence as best they can.
A major component of the code is player protection, a crucial consideration in today’s gambling landscape. It insists that PDCs are restricted to participants aged 18 or over and mandates that operators monitor player behavior for signs of harm, providing clear directions to support services when necessary. Operators are also advised to allow players to establish monthly spending limits, which can be set as low as £0. They can also impose their own limits, though the use of credit cards is capped at £250 per month per player, and they are prohibited in instant win games.
The code stipulates that both paid and free entry routes must offer equal chances of winning, ensuring transparency in how free entries work. Moreover, it mandates that free entry cannot be more burdensome than paid participation and must be prominently displayed before a player chooses to pay. This fairness in access is designed to uphold player confidence and trust in the system.
Transparency is further emphasized in the requirement for operators to clearly communicate the mechanics of each draw and, where feasible, the odds of winning. Prize allocations should be fair and independently verified, though exceptions exist for computer-aided random draws. Operators are also urged to deliver the advertised prizes or equivalent cash alternatives, without reducing prize value or cancelling draws due to low ticket sales.
Accountability is another pillar of the code, requiring operators to monitor compliance actively and resolve issues swiftly. This includes ensuring that any third-party affiliates also comply. Sharing best practices within the sector is encouraged, particularly in areas concerning player protection and transparency, with operators expected to publish their adherence measures on their websites.
Despite being a fresh initiative, the code has garnered support from a variety of market players. Omaze, Daymade, BOTB, and Dream Car Giveaways, the latter recently acquired by Jumbo Interactive, are among the signatories. Elite Competitions, active in the prize draw arena since 2016, also endorsed the code. Alex Beckett, Elite’s CEO, hailed it as a “major milestone,” emphasizing how it would foster player trust by setting clear and consistent standards.
“The collaboration with DCMS has been instrumental,” Beckett reflected. “For the first time, prize draw operators are uniting to prioritize transparency, fairness, and integrity. Players can now engage in these competitions with confidence, assured that they are protected by stringent standards.”
However, the Lotteries Council remains critical, reiterating its call for regulatory oversight of the PDC sector. George Collins, the council’s chair, pointed out the perceived inequities between free prize draws and society lotteries, which face strict limits, including a maximum prize of £500,000. He argued that commercial prize draws offering multi-million-pound jackpots undermine fair competition and jeopardize funding for charity lotteries and the National Lottery.
“The disparity in oversight dilutes fair competition and threatens crucial revenue streams for good causes,” Collins stated. “We urge the government not only to monitor compliance closely but also to consider further regulatory actions to ensure a consistent and fair framework.”
In summary, the DCMS’s voluntary code represents a significant step for the PDC sector, introducing crucial guidelines intended to enhance transparency, protect players, and promote accountability. Yet, the ongoing debate over whether voluntary compliance is sufficient highlights differing views within the industry, suggesting that the quest for fair regulation is far from over.
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