Majority of Free Prize Draw and Competition Players Gamble Elsewhere

An 80% majority of players who spend money on free draws and prize competitions are also participating in other gambling activities, a Gambling Commission report has found.

The British regulator’s data showed four in five respondents who had spent money on a free prize draw or competition in the past four weeks had also participated in other gambling activities within that timeframe. A total of 22% of respondents had engaged in one gambling activity, while 25% had participated in two gambling activities.

From those gambling activities, the most common form of participation was in lottery draws, with 68% stating they had taken part in a lottery draw in that four-week period. Meanwhile, 25% of respondents who had gambled in that four weeks participated in scratchcard betting, and 23% played online instant win games.

What are free prize draws and competitions?

The Commission classes free draws and prize competitions as activities run for commercial or private gain which are used to offer products and high-value prizes such as cars or houses.

Free draws have two structures. In one instance, players can enter for free, or at least will not be charged beyond the standard price of communication, such as the price of a postage stamp should the free entry be by post. In the other format, both paid and free entry options are offered.

In prize competitions, the main difference is they require an element of skill. If a challenge is sufficiently able to deter a significant number of people from entering, or prevent a significant proportion from winning, it will qualify as a genuine prize competition under UK law.

How the data was collected

The Commission’s report drew upon three data sources to collate the data: the Gambling Survey for Great Britain; YouGov Finance open banking data, which allowed the Commission to identify transactions with free draw and prize competition providers; and web traffic data from SimilarWeb, allowing the Commission to assess the scale and reach of providers.

The Commission also tracked the average amount users spent across a 12-month period. Users spent an average of £75.38 across all free prize draws and competitions, with web traffic data showing users visited these operators at an average of 3.4 times per month. Total monthly visits averaged close to 479,000.

The data showed higher amounts of spend were being made by more frequent players. In the highest spend quartile, users spent £141.85 across 14 transactions, with operators in that group seeing an average of 4.5 user visits per month. However, users in the lowest spend quartile spent £28.93 across an average of 3.6 transactions, with an average of 2.9 website visits per user per month.

Free draw and prize competition operators in the upper-middle quartile recorded the highest total monthly visits at 909,210, despite a lower per-user visit frequency of 2.7 visits on average per month. This would suggest these sites appeal to a more broad audience demographic, even if those individual users are not engaging as frequently.

“An analogous activity”

The Commission said the report shows gambling is an activity that sits alongside free prize draws and competitions, stating: “Overall, we have seen a range of experiences from participants of free draws and prize competitions, which appear to be a semi-regular activity for many users. This is shown by the consistent patterns of both financial and digital engagement.

“We understand that the activity is popular among consumers, at a similar level to online instant win games, with a similar customer demographic profile to lottery draws. We have seen that free draw and prize competition participation is likely to sit alongside gambling as an analogous activity.”