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Competition Time… Feeling Lucky?

Are you planning a competition or prize draw to promote your business or a new product? Well, read on… there are certain things to avoid when running a prize promotion.

Avoid at all costs being a lottery!

Lotteries involve the distribution of prizes by chance to participants who have made a monetary contribution.  Most lotteries are illegal, and those that are legal normally require a licence.

If there is a cost to enter, it must be skill based (a competition)

Paid entry competitions must require a significant element of skill and not consist of ‘guessing the outcome’.  For example, guessing the outcome of a race or a competition would constitute betting and be caught under the Gambling Act.

If the winner is chosen at random, then it should be free to enter (a prize draw) and each person should have the same chance of winning

Random winners must come from a free-to-enter prize draw.  If the winner is chosen at random and there is a charge to enter, then this would constitute a lottery.

Needing to pay the normal postage rate or cost of a standard rate telephone call, or buying a product (at its usual price, not an inflated one to cover the promotion) would still qualify as free-to-enter provided this is the only contribution that an entrant would have to pay to take part.

The chances of success must be the same for everyone regardless of how they entered.

Make sure terms and conditions are available for participants

These need to be made available before the participant enters the competition or prize draw.  These should include details of how to enter, the rules, starting and closing dates, when winners will be announced and how, when the prize will be awarded, whether there is a cash alternative and any restriction on the number of entries.

Do not exaggerate!

Do not exaggerate the prize or chance of winning.  Never imply that some consumers are luckier than others by using words such as ‘finalist’ or wrongly claim that a participant has won or will win on doing a certain thing, especially if the prize does not even exist!  The general rule is to be honest and not misleading.

Use independent judges

If the selection of a winner is based on a subjective interpretation, then an independent judge should be used.  The full name(s) of the judge(s) should be made available to entrants.

Comply with other laws too!

As well as ensuring you don’t fall foul of the lotteries and gambling legislation, you need to make sure that any personal data collected from participants is compliant with GDPR and that the competition / prize draw advert falls in line with advertising standards and codes.

This article was written by Clare Veal

Please note the contents contained in this article are for general guidance only. Legal advice should be sought before taking action in relation to specific matters.

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