There's often confusion around why you need a solicitor for a competition business. Is it necessary to avoid fines or a potential shutdown? You may think you can get by without one, but usually you'll save time and cost in the long run working with an experienced solicitor.
Are competition websites legal in the UK?
They are legal but you have to abide by certain guidelines to make sure you remain compliant.
A prize competition has to involve a level of skill, knowledge or judgement to enter. It has to deter a portion of potential buyers or prevent some buyers from winning. The difficulty of the skill-based element must be sufficient to achieve either of these, or it will be classed as an illegal lottery.
The common misconception with this is that multiple choice questions that allows multiple tries are adequate. As outlined by the UK Gambling Commission, they are "rarely able to meet the criteria".
However, you may notice that the most popular competition sites do not require you to take part in any sort of skill-based element.
This is where "free draws with a paid entry route" come in...
This is remarkably similar to a prize competition, except you don't need a skill based element, but you need to ensure you meet a strict free entry route protocol:
- The free entry route can be no more expensive and must be no less convenient than the paid route.
- Free and paid entry must be entered into one draw fairly.
- Both free entry and paid entry must be promoted and advertised at the same level.
You must also find a payment provider to support either prize competitions or free draws. Each payment provider will set rules for their clients, e.g. not using the word "lottery" to describe your business or having certain website security features.
Check out our full guide surrounding competition payment gateways to learn which payment provider will cause you the least headaches.
When you do you need a solicitor?
1. Writing Legally Compliant Terms & Conditions
The main task of a solicitor will be writing your terms and conditions. This is the largest policy your website will have. It prevents legal action from customers when the competition business isn't at fault and ensures compliance with the UK Gambling Commission.
You'll need to specify how each of the following works:
- Entry rules
- Winner selection
- Refunds
With Ofcom implementing the Online Safety Act, we anticipate that its only a matter of time before stricter age verification is required on competition websites. A solicitor would be essential to ensure that your setup is compliant whilst working alongside your web designer.
2. Avoiding Gambling Regulations
Whilst we've provided some basic information on gambling regulations above, we always recommend speaking with a solicitor about the exact regulations and wording schemes you have to follow. For example, using the word "lottery" instead of "competition" is an innocent mistake, but can cause your website to not be compliant.
3. Handling Large Prize Values
Something you may need for later down the line is a solicitor for handling large prize values, for example:
- Cars
- Large Cash prizes
- Luxury watches
They're all very common prizes that need to be dealt with carefully. Although a £500 cash prize for your first competition wouldn't need a solicitor, it would be best to start these discussions with a solicitor early.
4. Data Protection & GDPR
Almost every high-performing competition business collects emails and phone numbers for marketing purposes. This falls under GDPR and can land you with a hefty fine if not dealt with correctly. You can manage this part yourself with a bit of research. But, if you already have a solicitor for steps 1-3, most people opt for them to sort out their email collection and marketing consent policy too.
The risk of getting it wrong
If you're on the fence about getting a solicitor, this should be the decision maker. The risk of getting it wrong can absolutely destroy the business. The main things you'll instantly think of is facing fines from the UK Gambling Commission, which is of course the largest threat.
However, even if your payment gateway thinks you're not in compliance, they can shut your account with them down. This may not seem like a big issue, but changing payment providers can take weeks. Thus, losing your customers interest and contributing to a declining reputation among your target audience.
The Easiest Way to Stay Compliant (Recommended Option)
If you want to remove the guesswork, working with a specialist legal partner is the safest route. You need somebody well versed in gambling law and preferably with somebody who has dealt with competition businesses previously. Cutting costs on solicitors will likely just end up with more headaches. We've seen it happen.
Our recommendation is Sprint Law. They make sure you can focus on selling tickets, rather than dealing with legal hassle. We've worked with them over the past couple years and we're very impressed with their knowledge on competition businesses.
DIY vs Solicitor – What’s Better?
| Option | Pros | Cons |
|---|---|---|
| DIY Legal Setup | - Low cost (or free) - Quick to launch - Full control over setup - Access to templates and online resources | - High risk of legal mistakes - Easy to misunderstand UK competition law - Payment providers may reject you - No protection if disputes arise - Can damage trust if terms aren’t clear |
| Using a Solicitor | - Ensures full legal compliance (UK law) - Properly structured terms & conditions - Reduces risk of being classed as gambling - Helps with GDPR and data protection - Increases trust with users and payment providers | - Higher upfront cost - Slower initial setup - Requires choosing the right legal partner |
FAQ
Do I need a free entry route for my competition website?
Not always, it depends on your legal model.
- If you’re running a genuine skill-based competition, you do not need a free entry route
- If there is no real skill involved, then you must provide a free entry option
Do I need terms and conditions for a competition website?
Yes, this is essential.
Your terms and conditions should cover at least:
- Entry rules
- Eligibility
- Winner selection process
- Prize details
- Refund policies
Do I need a licence to run a competition website in the UK?
No, you do not need a licence to run a competition website in the UK as long as it is structured correctly.
Your business must fall into one of these two legal categories:
- Prize competition (skill-based)
- Free prize draw (with a valid free entry route)
How much does a solicitor cost for a competition business?
The cost of using a solicitor can vary depending on the level of support you need.
Typical ranges:
- Basic review / advice: £200 – £500
- Terms & conditions drafting: £500 – £1,500+
- Full legal setup (compliance, structure, GDPR): £1,000 – £3,000+
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