Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Promoters should take legal advice before embarking on promotions with prizes, including competitions, prize draws, instant-win offers and premium promotions, to ensure that the mechanisms involved do not make them illegal lotteries (see the Gambling Act 2005 for Great Britain and the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (as amended) for Northern Ireland).
Promoters should consult the Gambling Commission guidance on Free Draws and Competitions, and seek legal advice to ensure the presentation and mechanism of any free entry route is sufficient.
How should the free entry route be presented?
Don’t confuse entry routes and claiming routes
What is a free entry route?
The Gambling Commission guidance on Free Draws and Competitions makes clear that a free entry route is any method of entry charged at the normal rate. This means that there can be no additional payment over what it normally costs to use a particular method of communication. Methods of communication which are charged at the normal rate, and therefore are considered free entry routes may include the cost of sending a letter by ordinary post (ordinary first-class or second-class post), the standard cost of a telephone call, or the minimum cost of sending an e-mail or standard SMS text message.
Any cost which goes beyond the normal rate, such as the requirement to send something via special delivery, to call a premium rate number or send a premium rate text are likely to be considered unacceptable.
Directing participants to a website address where they can enter for free is likely to be considered a free entry route.
Do I need a free entry route?
Promoters should contact the Gambling Commission or seek legal advice before proceeding with any prize promotions to ensure that they are not running an illegal lottery.
CAP understands that lotteries are generally illegal unless licensed by the Gambling Commission or they are a small or private lottery or part of the National Lottery. A prize promotion might be considered an illegal lottery if winner selection is based on chance, and participants are required to pay to enter or to pay for goods at a price that reflects the opportunity to participate. If promotors run a prize draw which has a payment to enter, the promotion must also have a free entry route so that people can choose to take part without paying, otherwise they may be considered illegal lotteries unless licensed by the Gambling Commission. (See Promotional Marketing: Lotteries and Betting and Gaming: Lotteries).
Having to buy a product to enter a prize draw is unlikely to be considered a payment to enter, provided the cost of that product has not been changed to reflect the opportunity to participate. Some examples of prices that reflect the opportunity to participate include increasing the price of a promotional pack compared to non-promotional packs before, during or after the prize promotion or reducing the quality or composition of the paid-for product or service during the promotion.
Prize competitions are unlikely to need a free entry route, and it is fine to require a payment to enter. A prize competition must require entrants to exercise skill or judgment or to display knowledge, such that it can reasonably be expected to prevent a “significant proportion” of people from participating or from receiving a prize. Advertisers should contact the Gambling Commission or seek legal advice in relation to what constitutes sufficient skill or judgement.
How should the free entry route be presented?
Code rule 8.17.2 states that any free-entry route should be explained clearly and prominently. Regardless of whether a promoter is required to have a free entry route, or has chosen to do so, information about it is considered a significant condition and should be stated in the initial advertising material(See Promotional marketing: Terms and Conditions).
Information about a free entry route should be presented in a way which ensures that those who see the ad and want to participate can see it and should be promoted at the same level as the paid for route. Promoters should consult the Gambling Commission guidance on Free Draws and Competitions, and seek legal advice to ensure the presentation and mechanism of any free entry route is sufficient.
In 2017 the ASA investigated whether an ad for a prize draw which participants could buy tickets to enter made the free entry route sufficiently clear. The ad separated the instructions for entering for free by post from the links to where participants could buy tickets. The links were followed by the text "WHAT ARE YOU WAITING FOR? LET'S GET STARTED WITH THE COMPETITION"; with a prominent visual device showing the text "BUY TICKETS" across two paper tickets. The ASA considered that participants could easily miss the free entry route and that therefore, it was not sufficiently prominent (HMV Competitions, 11 April 2018).
The free entry route should be presented clearly, and it will not be sufficient to only reference this in small print at the bottom of a page, or in full terms and conditions. The ASA upheld complaints about an ad which stated “Look up T&Cs for free entry method” in small text at the bottom of the page but did not include any other information and did not include a link to the terms and conditions page. On the terms and conditions page the free entry method was stated within a long series of terms and conditions. The ASA considered that by including information about the free entry route only in the terms and conditions meant it was not explained clearly and prominently and that therefore the ad was misleading and breached the Code (KS Competitions Ltd, 02 December 2020).
The ASA may also consider the relative prominence of the paid entry route and free entry route in the ad, when assessing whether the free entry route is sufficiently clear and prominent. In 2020 the ASA considered a promotion which could be entered via its free-entry route by sending a postal entry. On the list where visitors could select how to enter the competition, the top option stated, “Postal Entry” alongside a link which stated, “More Info”. Although the option was at the top of the list, there was no further information regarding the free-entry route, for example, the cost associated with that entry method or which promotions participants would be entered into. In comparison, the paid “Online Entry” methods appeared significantly larger and included a ticket shaped graphic and a pink box which stated, “Buy Now”. Those entry methods also included information about the cost of entry, the number of entries, the cost per entry and which promotions participants by that method would be entered into. Although further information about the “Postal Entry” free-entry was available one click away, the ASA considered that the information about the free-entry route was not explained clearly and prominently, and therefore concluded that the ad was misleading and breached the Code (Omaze Inc, 07 October 2020). (These rulings also concern property being offered as a prize, and promotions which do so are likely to be subject to legislation. Advertisers should read the AOL on ‘Win a house’ promotions and seek legal advice before offering property as a prize).
Don't confuse entry routes and claiming routes
Promoters should not confuse entry routes and claiming routes, and promotions should never have a cost to claim (Rule 8.21.1). The ASA has upheld multiple complaints against an ad for a promotion because it required consumers to ring a premium rate service to claim an award, which was a breach of Code rule 8.21.1 (Churchcastle Ltd t/a Spencer & Mayfair 2011, 20 February 2013).
This advice is designed to be read in conjunction with Section 8 of the CAP Code (Promotional Marketing), and Advertising Guidance on running promotions with prizes.