Raffles & Competitions in the UK: What Businesses Need to Know About Payments & Compliance

The £1.3 billion sector, spanning church halls through to tombola stalls

Just a few years back, a raffle in the United Kingdom was associated with strips of ticket paper, a rotating drum, and a prize awarded by the neighborhood butcher. Now, this idea of cheap, easy opportunity has grown into one of the UK’s fastest-growing digital industries.

A 2025 study by the Department for Culture, Media, and Sport (DCMS) estimates annual revenue at £1.3 billion.

The statistics speak for themselves in terms of a phenomenon that has occurred rapidly and irreversibly. There has been a marked rise in competition among enterprises incorporated through Companies House.

Survey findings in the industry show that 60% of respondents believe ticket sales will grow in the next three years. Only 5% think ticket sales will fall. On the demand side, more people are reporting increased expenditure compared to decreased expenditure in the previous year.

The growth of the raffle industry in the UK has been helped by the internet and social media. It has also been driven by customers who feel safe paying small amounts online for big wins.

It has gone from an easy community activity to a modern online one. It offers big prizes, clear drawings, and easy entry.

The platforms offer participants luxury sports cars and six-figure cash prizes. They also offer dream weddings, custom vacations, and more. Fees range from a few pennies to a couple of pounds.

The odds are better than any traditional lottery.

While the National Lottery attracts about 44% of UK adults each year. It has a turnover of £8.2 billion. Competition websites usually limit the number of tickets. This translates into much better odds for participants without sacrificing the opportunity to win a substantial amount of money.

Live stream draws.

Competition websites often run their draws by live stream on social media sites like Facebook, YouTube, and Instagram. This feature of social competitions proved crucial for gaining the trust of users in a sphere that was doubted before.

Virality on social networks.

"I won!" posts are now a trend themselves. There are large groups of "compers," that is, people who take part in competitions, sharing useful information, lists of live draws, and other advice on Facebook pages, subreddits, and online forums.

As impressive as the success rate may be, the UK competition industry functions within the boundaries of a highly regulated field. one that continues to develop rapidly.

According to the Gambling Act 2005, the key legal difference is between a lottery and a prize competition. A lottery requires payment to enter, and a winner is chosen at random. It also needs a license from the Gambling Commission. A prize competition includes a real, non-trivial skill element. It does not need a gambling license if the skill test is genuine.

Most competition websites get around this by making customers answer a multiple-choice question before buying something, which means they comply with the definition of the "skill element" under the Act. The option to enter the competition through a postal application is mandatory as well.

Further developments will likely add to existing pressures. For example, the recently enacted Data (Use and Access) Act 2025 introduces additional requirements related to data processing (e.g., increased powers of the Information Commissioner's Office). The CAP Code continues to regulate advertising standards, and you should keep track of its decisions.

There exists one issue in the competition industry that has received little recognition but can cause some serious problems:

As competition sites are seen as part of a high-risk industry, no ordinary payment systems would work for them. Due to the nature of their activity and potential risks associated with gambling, payment processors such as Stripe and PayPal regularly refuse cooperation in such cases.

Any competition site must have a reliable and secure payment system. Without it, no matter how exciting the prize is or how well-prepared the legal framework, there will be nothing to start with.

That is where Paytriot Payments comes into play.

How Paytriot Stays Ahead with the Trend

Expertise in managing high-risk merchant accounts.

The Paytriot team is familiar with the nuances associated with high-risk merchant accounts in competitive companies and assists in the approval process which involves understanding the necessary documents, proper legal structure, and presentations to the acquiring bank.

In order to approve the high-risk merchant account, knowledge about how to present the business is crucial, and it is an area where Paytriot has a competitive edge, having helped many similar customers.

Payouts every week.

Unlike other payment processors, which pay out once a month, Paytriot provides payouts weekly. This is critical because most competitive businesses have a short period between selling out their draws and requiring money for the next round.

3D Secure protection.

Since one of the main risks associated with this type of activity is the high potential for chargebacks, Paytriot uses 3D Secure protection by default.

Integration with e-commerce platforms.

Paytriot partners with some leading platforms for e-commerce such as Shopify, BigCommerce, and WordPress and even banks such as SEPA and UK BACS. Paytriot’s dashboard offers operators an overview of all transactions in real time. In addition, the company provides a custom Paytriot wallet service that allows customers to make payments through their saved credentials at participating websites.

Embedding in the ecosystem.

Paytriot is so much embedded in the competitive field that it has become the most recommended platform for specialized raffle website providers like RaffleHub. In fact, raffle website design companies often recommend Paytriot as the most important platform to integrate with. It represents a powerful network effect in which Paytriot becomes the default choice for all competitors in the ecosystem.