Free draws and prize competitions have moved from the margins to the mainstream. Luxury houses, high‑end cars and eye‑catching cash prizes are now promoted across social media feeds and inboxes with a familiarity that would have been unthinkable a decade ago. To the average consumer, these products look, feel and behave very much like lotteries. Yet in law, they sit outside gambling regulation.

The Gambling Commission’s recent research into the consumer landscape of free draws and prize competitions quietly exposes the tension at the heart of this position. When you look at how people actually engage with these products, the distinction begins to look more theoretical than real.

A legal distinction, not a lived one

A society lottery is straightforward. People pay to take part, the outcome is determined by chance, and the activity is regulated because it is gambling. There are rules, limits and licensing requirements because money is being risked for the possibility of a prize.

Free draws and prize competitions exist because of exemptions in the Gambling Act 2005. A free draw avoids regulation by offering a free entry route. A prize competition avoids regulation by claiming that skill, knowledge or judgement determines the outcome. When carefully structured, both can be lawful without a licence.

But legality does not always align with consumer experience. The Commission’s own survey asked a simple question: had people spent money in the last four weeks to enter an online draw for a substantial prize, such as a luxury house? Eight per cent said yes. That is the same level of participation as online instant win games, and not far behind other mainstream gambling products.

From the consumer’s perspective, this is not a niche or incidental activity. It is part of the same entertainment mix as lotteries, scratchcards and online games.

Who is taking part, and how often?

The demographic picture is telling. Participation in free draws and prize competitions is concentrated among adults aged 25 to 64, with the highest levels in the 45 to 54 age group. Men and women take part in equal measure. This mirrors society lottery participation almost perfectly.

More revealing is what participants do alongside free draws. The research shows that four in five people who spent money on a free draw or prize competition also took part in at least one gambling activity in the same period. Most commonly, that was lottery draws, scratchcards and online instant win games. These are not casual dabblers drifting between unrelated products. They are consumers engaging with a familiar format, simply delivered through a different legal wrapper.

Not free, not occasional

The phrase “free draw” carries a comforting implication: that cost is optional and engagement is light. The data challenges that assumption.

Open banking analysis shows that users spend, on average, around £75 a year on free draw and prize competition providers, across multiple transactions. Higher‑spending providers see users returning frequently, both in terms of payments and website visits. Web traffic data reinforces this picture. People are not visiting these sites once out of curiosity. They are returning month after month, with engagement peaking in the run‑up to Christmas in a way that looks remarkably like lottery behaviour.

This is sustained, repeat participation involving money, chance and the prospect of a life‑changing prize. Those are the core ingredients of gambling, regardless of whether a free postal route exists in theory, or a token question is asked before entry.

Why regulation matters

Society lotteries operate under licence because we recognise the need for consumer protection, transparency and accountability when people spend money on chance‑based products. Limits on prizes and sales, clear rules, and regulatory oversight are not administrative burdens; they are safeguards.

Free draws and prize competitions, by contrast, rely on compliance with technical exemptions. Oversight is lighter, consumer understanding is often poor, and responsibility is largely voluntary. The introduction of a voluntary Code of Conduct for prize draw operators is a tacit acknowledgement that standards need to rise. Voluntary codes, however, are not a substitute for regulation.

The Commission’s research demonstrates that free draws and prize competitions sit squarely within the same consumer landscape as regulated gambling. They attract the same people, in similar numbers, for similar reasons, with similar patterns of spend and engagement. The only meaningful difference lies in legal classification, not consumer harm, behaviour or expectation.

Time for an honest conversation

The Gambling Act 2005 was written for a different era. Digital‑first prize draws offering million‑pound houses were not part of the mainstream consumer environment at the time. The evidence now shows that these products function as gambling in all but name.

If it looks like gambling, feels like gambling and is used like gambling, regulating it as gambling is not regulatory overreach. It is regulatory coherence.

For charities running society lotteries, this matters deeply. They operate under strict rules, accept regulatory scrutiny and exist to raise funds for good causes. They do so in a marketplace where unlicensed products compete for the same consumers, with fewer constraints and higher prizes. That imbalance is becoming harder to justify.

The Gambling Commission’s research does not argue this case explicitly, but the implications are clear. Free draws and prize competitions are no longer peripheral. They are embedded in consumer behaviour. Treating them as something other than gambling is increasingly out of step with reality.

The question is no longer whether these products resemble gambling. The evidence shows that they do. The real question is how long regulation will continue to pretend otherwise.