A paid online raffle decided purely by chance is a lottery, which a business cannot run for profit. Online raffle sites stay legal by running as prize draws with a free entry route, usually by post, or as prize competitions with a genuine skill question. The Government also publishes a voluntary Code of Good Practice for operators.
Raffles, lotteries and prize draws
Under the Gambling Act 2005, an arrangement where people pay to enter and prizes are decided by chance is a lottery. Lotteries can only be run by licensed societies, such as charities, or in a few exempt situations. A commercial business cannot run one for profit.
How online competitions stay legal
Online raffle sites usually run as prize draws with a free entry route, or as prize competitions with a skill question. Either can take them outside the definition of a lottery.
What a free entry route needs
A free entry route has to be a genuine alternative. It should be publicised as clearly as paid entry, give the same chance of winning, and cost no more than standard postage. Postal entry is the most common route.
Skill questions
A skill question has to be hard enough to stop a significant number of people entering or winning. A very easy question may not be enough on its own, which is why most operators rely on a free entry route.
The Code of Good Practice
The Department for Culture, Media and Sport has published a voluntary Code of Good Practice for prize draw operators. It covers age checks, spend limits, clear information on odds and free entry, fair draws and how winners are handled. It is voluntary today, but following it shows players and payment providers you run properly.
Advertising rules
Promotions must follow the CAP Code, enforced by the Advertising Standards Authority. Be clear about how to enter, closing dates and significant terms.
Get advice
The rules turn on detail. Have a solicitor who knows prize competitions review your model and terms before you launch.
Last updated 25 October 2026. This guide is general information, not legal or financial advice.