So what are the kinds of things that lawyers think about when drafting terms and conditions for, and advising on, website prize competitions, prize draws, raffles etc?
Is it a legal prize competition?
You must ensure that your competition is not an illegal lottery.
The competition is a legal prize competition if the outcome is decided by “skill, judgment or knowledge”. But it’s not enough to ask: “What is the capital of England?”. Your questions must stop a significant number of potential entrants from participating. Or at least winning a prize.
Obviously, make the questions as hard as possible. The bigger prize, the tougher the questions should be. And the more questions, the better. For multiple choice, provide a sufficient number of plausible answers.
Keep records showing that entrants gave a significant proportion of wrong answers in your previous similar competitions. That may help you justify a high success rate in a disputed competition as being a one-off. And one which you it was reasonable for you not to expect.
Is the competition a lawful free draw?
This is the other main way around the illegal lottery rules. The competition is a lawful free draw if all entries are free. But also, crucially, if the competition offers both free and paid routes.
Of course, there are restrictions here too. If you allow free entry, this must include first or second-class post. You must publish the free entry route equally with the website entry option. Don’t make the website entry easier. We suggest you keep screenshots so you can prove this later if need be. Also, don’t distinguish between free and paid entrants when allocating prizes.
Again, having a record showing the proportion of free entrants per competition may be helpful later.
What other regulations apply to competitions?
As well as the Gambling Act requirements, mentioned above, a range of regulations and codes of conduct apply. Some include rules specific to competitions. Others are more general consumer protection laws.
For example, the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (known as the “CAP Code”). Amongst other things, this requires you to provide competition TCs to entrants. And to clearly communicate all “significant conditions”. Such as:
- How to participate.
- Any restrictions on the number of entries.
- Free-entry routes.
- Start and closing dates.
- How prizes are awarded.
- How results are notified.
- Prizes, including restrictions, cash alternatives and timescales.
- Winner publicity.
What do lawyers include in competition terms and conditions?
Amongst many other things, the terms and conditions for the competition will typically cover:
Entry requirements, including the means of, restrictions on, and right to reject entries. Depending on the competition model, the free entry and skill aspects.
Closure of the competition, including extensions.
Award, notification and delivery of prizes. For example, what if the winner doesn’t respond to the prize notification or is not in when the courier tries to deliver the prize?
General provisions, e.g., the right of the operator to cancel prizes or competitions and remove users in exceptional circumstances.
Other legal terms, such as those designed to try and minimise the competition operator’s legal responsibility if something goes wrong.
- See the quick guide from the Gambling Commission “Running prize competitions and free draws – Making sure you stay within the law”
- See section 08 of the CAP Code on “Promotional Marketing”