The UK Department for Culture, Media and Sport (DCMS) has introduced a new set of player safety standards for prize draws.
Since prize draws are not regulated by the Gambling Act 2005 as they support both a paid and free entry route, the new rules are viewed as a major positive as they will bring the segment under the same strict player protection regulations that gambling is subjected to.
Although voluntary, the code has already been signed by more than 100 prize draw providers, with the provisions covering both the paid and free options.
More marketing and stronger player safety
Paid entries will now have a £250 monthly cap on credit card payments, with credit cards banned altogether for instant-win competitions. Free routes will have to be expansively marketed and made easily accessible for all eligible players – with all prize draw advertisements required to comply with the UK Advertising Standards Authority (ASA).
Player safety requirements across both options will see signees implementing harm mitigation measures, including signposting to support, robust age verification, as well as monitoring of behavioural patterns, financial distress, frequency of spend limit reached, and markers of financial distress.
Last but not least, operators that sign the voluntary code will have to conduct regular reviews of their compliance with the provisions, the integrity of their third-party contractual obligations, and facilitate close collaboration with the DCMS.
“The new Voluntary Code sets a higher bar for prize draw operators, even though the sector still sits outside the formal gambling licensing regime,” commented David Inzani, lead solicitor at licensing law firm Poppleston Allen. “Many of the expectations, such as credit card limits, age restrictions, spend limits and draw transparency, bring the sector more in line with some of the requirements placed on licensed gambling operators.
“For those that sign up, implementing the Code is likely to require investment and will add to operational processes and running costs. It should however help build consumer trust at a time when the prize draw sector is attracting more attention.
“As the title states, the Code is voluntary, does not have any teeth and does not create any new legal duties. The pressure to sign up comes from the government’s warning that if operators do not implement the measures, then statutory regulation could follow, although could take some time.
“Early adopters of the Code may find themselves better positioned if legal requirements are introduced further down the line, as well as reaping the reputational rewards in the meantime.”
The need for such measures becomes even more evident when looking at the size of the prize draw sector in the UK. According to the DCMS, the market’s value was around £1.3bn at the end of 2023, with 7.4 million adult customers and more than 400 operators engaging with the sector. A total of 88% of the player pool are also commercial gambling and lottery players.
Gambling Minister Baroness Twycross also endorsed the new provisions: “Millions of people enjoy entering prize draw competitions every year, and they should be confident that reasonable protections are in place. Thanks to the introduction of this code, that will be the case.
“I want to thank all of the operators who have already signed up, both for their cooperation in developing the code, and their commitment to following it moving forwards.”
The DCMS concluded that based on its effectiveness, it might consider making the voluntary code an official UK legislation.