Guide
Prize competition vs raffle vs lottery — what's the difference?
The short answerA raffle is a kind of lottery: paid entry, randomly drawn winner. A lottery in the UK requires a licence or exemption. A prize competition is different — it must involve a genuine skill element or include a free-entry route, and it is not a lottery under the Gambling Act 2005. A free draw has no paid-entry requirement at all. The structure you pick determines the rules you have to follow.
By Kirill Grouchnikov — Founder, Raffair. Published .
General information, not legal advice. Always check the current Gambling Commission guidance for your specific situation.
Definitions
The three terms get used interchangeably in everyday English but they mean very specific, different things in UK gambling law.
Lottery
A lottery is an arrangement where people pay to enter and the prize is allocated wholly by chance. A "raffle" — paid entry, randomly drawn winner — is a kind of lottery. Lotteries are regulated by the Gambling Act 2005 and are illegal unless they fall under a specific exemption (most commonly small society lotteries).
Prize competition
A prize competition is an arrangement where people pay to enter and there's either a genuine skill, knowledge, or judgement element that meaningfully limits the field or a free-entry route running alongside the paid one. Either of those carves the activity out of the lottery definition, so a prize competition does not require a licence.
Free draw
A free draw is an arrangement where entry is genuinely free for everyone. No payment, no skill required. Free draws are unregulated and don't need any licence or registration.
Key differences
- Paid entry + pure chance = lottery. Illegal unless licensed or exempt.
- Paid entry + skill OR free-entry route = prize competition. Legal without a licence.
- Free entry only = free draw. Unregulated.
The line between "skill element" and "no skill element" is where the Gambling Commission has historically focussed enforcement. A trivial question (one that essentially everyone gets right) doesn't qualify as skill — that's the single most common compliance error among well-meaning operators.
Which one applies to you
Work backwards from how entrants will participate. If money changes hands and the only way to win is paid entry plus random luck, you're running a lottery — and unless you have a society-lottery registration or operating licence, you can't do that legally.
For the full route-by-route walkthrough see how to run a raffle legally in the UK. For the cost picture once you've picked one, see our pricing page.
Primary sources: Schedule 2 of the Gambling Act 2005 (definition of lottery); Gambling Commission Lotteries and the Law guidance on prize competitions and free draws.
Frequently asked questions
Is a 'prize draw' the same as a raffle?
In everyday English, yes. In UK law, 'prize draw' usually means a free draw — entry is free and there's no payment. A paid-entry 'prize draw' would legally be a lottery.
Related guides
How to run a raffle legally in the UK (society lottery vs prize competition vs free draw)
The three legal routes for UK raffles explained: society lottery, prize competition, and free draw. Which applies to you, and what each one requires.
How to run a raffle online (UK & Ireland) — the complete 2026 guide
Step-by-step: pick a legal route (society lottery, prize competition, or free draw), set a price, run the draw, and pay the winner. UK & Ireland.
About the author
Kirill Grouchnikov
Founder of Raffair. Building the UK's first transparent-pricing raffle platform after watching small charities and creators lose 15–25% of their gross to incumbent platforms. Writes about raffle compliance, payments engineering, and trust mechanics.