The Fundraising Regulator has proposed introducing a requirement for all prize draws bearing its logo to contribute a minimum of 20% from their annual ticket sales to charities.
It launched a consultation on the proposals last week after seeing an increase in free draw and prize competition operators applying to register with the regulator in order to use its fundraising badge on their websites.
An initial 10% contribution threshold was proposed by the regulator for 2026-27, rising to 15% the year after and 20% from 2028-29 onwards.
The regulator has paused new registrations from such operators until September while it consults on the proposed changes.
It has invited charitable draw operators to respond to its consultation by 3 April, after which the regulator will review responses and publish a final decision.
Free draws such as Omaze that support charities have grown in popularity in recent years, but they are not regulated by the the Gambling Commission, as society lotteries are.
Society lotteries, which are already required to contribute at least 20% of their ticket sales to charities, have long expressed concerns about a lack of similar regulation for prize draws.
In a blog post, Ian Larkham, head of finance, registration and IT at the Fundraising Regulator said the difference in regulation “can cause some confusion for the general public about how much money goes to charities”.
Voluntary government code incoming
Meanwhile, the Department for Digital, Culture, Media & Sport (DCMS) is introducing a voluntary code for prize draw operators on 20 May.
The code, announced in November last year and agreed to by Omaze among others, dictates that operators providing a charitable contribution as part of a prize draw “should outline clearly the parameters surrounding these contributions”.
In response to the DCMS code, the Lotteries Council chair George Collins said at the time that it “does not resolve the regulatory imbalance between free prize draws and society lotteries”.
Collins added: “Free prize draws continue to operate with no meaningful oversight, while society lotteries face strict limits, including a maximum prize of £500,000.
“At the same time, commercial prize draws are still permitted to offer multi-million pound jackpots that were intended to be reserved for the National Lottery.”
