DCMS Study Prompts UK Crackdown on Online Prize Draws and Competitions

PDC games can be entered through either a free or paid entry route, but the chances of winning are entirely a matter of luck. They are exempt from the regulations of the Gambling Act 2005 because they offer free postal entry or skill-based questions which exempts them from certain gambling definitions. An example of this type of game is a car dealership running an Instagram competition for the chance to win a brand-new car. The user can enter by answering a quiz question, removing the necessity to make deposits or enter any personal details.

The study’s main finding was that there is a “clear risk of gambling harm” for players, emphasised by the lack of responsible gambling tools surrounding PDCs. 12% of PDC players gamble with negative consequences, compared to 3% of the general public and 5% of gamblers overall. Politician Baroness Twycross said, “This government has made it clear that we want people who participate in prize draws to be confident that proportionate protections are in place.” These protections are currently speculative, with no clear direction having been taken.

The alluded solutions have a primary focus on reducing harm, increasing transparency and protecting charitable donations. This could be achieved through implementing age verification processes for participants, or it could involve an intervention that is likely to change primary legislation altogether. 40% of all gambling providers are currently offering some sort of PDC, so there is the potential for ramping up responsible gambling tools. For example, self-exclusion schemes, safer gambling messaging and spending caps.

This talk of regulation has been met with backlash. Richard Williams, Partner at Keystone Law said, “Introducing legislation to regulate commercial lotteries would be complex and as we have seen, this is not a priority for the government.” Helmut Becker, CEO of lottery company Zeal Network argued that lottery operators should focus on innovations within their own products rather than PDCs. The primary concern is the potential for reduced competition in the market and smaller casino operators struggling to cope with the increased costs.

With considerable uncertainty surrounding the government’s next steps, it will be interesting to see if there is a change in the regulations governing PDCs as a response to the study.