Only 20% Of UK Prize Draw Operators Have Signed Voluntary Code

Fewer than one in five UK prize draw operators have signed the industry’s Voluntary Code of Good Practice, according to an updated white paper from consultancy Rokker.

The report estimates that more than 1,000 operators are actively running prize draw competitions in the UK, up from the 401 identified by government research in 2023.

However, only around 195 operators had joined the voluntary code by late July 2026. Another 31 service providers were listed as “other relevant signatories”.

Voluntary code uptake remains limited

The Department for Culture, Media and Sport launched the code on 20 May 2026 to encourage stronger standards and consumer protections across the sector.

Prize draws with a free entry route do not currently fall under the Gambling Act 2005 and are therefore not regulated by the Gambling Commission, provided they meet the relevant legal requirements.

Despite its voluntary status, compliance with the code could help operators demonstrate that they are prepared for potential regulation.

"Millions of people enjoy entering prize draw competitions every year, and they should be confident that reasonable protections are in place." - Gambling Minister Baroness Twycross

Rokker said signatories are also being viewed as more attractive acquisition targets because they already have established compliance systems.

Membership fees range from £250 per year for operators with less than £2 million in UK turnover to £24,000 for those generating more than £50 million. Associate service providers pay £2,500 annually.

Prize draw acquisitions exceed £220 million

Rokker reported that merger and acquisition spending across the sector has now surpassed £220 million.

Major transactions include Winvia’s purchases of Best of the Best for £45.3 million, Click Competitions for £16.4 million and Rev Comps for £11.8 million.

Jumbo Interactive acquired Dream Car Giveaways and Dream Giveaway USA for a combined £94.1 million in October 2025.

ZEAL Network subsequently entered the UK market by purchasing SevenCanyon and related businesses for £38.6 million in July 2026. The portfolio includes 7days Performance, Redline Competitions and UK Carp Competitions.

Rokker expects consolidation to continue as well-funded groups pursue acquisition and organic growth strategies. Smaller operators that cannot invest in compliance, technology and tax planning may increasingly consider selling or leaving the market.

VAT dispute threatens operator margins

The sector is also facing uncertainty following HM Revenue and Customs’ clarification that paid prize draw entries are subject to VAT at the standard 20% rate, even when a free entry alternative is available.

Rokker said HMRC has contacted operators and asked them to reassess their historic VAT positions, potentially exposing some businesses to substantial retrospective bills.

At least one major operator is challenging HMRC’s interpretation through a tax tribunal. Hearings are expected in autumn 2026, with a decision anticipated by spring 2027.

DrawHouse has estimated that the VAT treatment could reduce operator margins by between 25% and 30%.

The uncertainty is already affecting acquisition valuations and terms. ZEAL reportedly secured a lower multiple for SevenCanyon after considering potential VAT liabilities, alongside insurance-backed indemnities for historic tax exposure.

Rokker concluded that operators with strong legal, tax and technology capabilities will be best placed to manage growing regulatory pressure and pursue further acquisitions.