The Rise of Self-Run Raffles & Prize Competitions: The Side Hustle Taking Over the UK (and the Legal Grey Area You Need to Know)
If you have lately spent any time on social media, you have most likely seen them: regular ladies from their kitchens and living rooms organise online lotteries and prize draws. From luxury handbags and beauty packages to cash rewards and technology devices, these contests are rapidly turning into a side gig. Still, what’s the catch?
Setting up a raffle or prize competition can seem like a fun and creative approach for many women trying to increase their income—whether to top off maternity leave, fund the family holiday, or just exercise their entrepreneurial muscles. The attraction is clear with little startup costs and perhaps large returns. Every would-be prize queen should be aware, though, that although the idea is flourishing, the legal structure behind these contests is at best unclear.
Why Raffles & Prize Competitions are So Popular
In an era where side hustles are often glorified on TikTok and Instagram, prize competitions tap into a perfect storm of trends — the thrill of winning, the social buzz of supporting small businesses, and the appeal of affordable tickets (often just a few pounds).
For people looking to balance family life, childcare, or even chronic illness with earning extra cash, this flexible income stream fits the bill. Some even use these raffles to clear out unwanted items (designer handbags they’ve fallen out of love with or luxury advent calendars they never opened) while others buy sought-after products to resell through draws.
The Legal Grey Area You Can’t Ignore
Here’s where things get tricky: running a prize competition or raffle in the UK isn’t as simple as posting a few tickets for sale on Instagram. In fact, the UK Gambling Commission has very clear rules — but they’re often misunderstood or overlooked by hobbyist organisers.
Raffles vs Prize Competitions – Know the Difference
- Raffles (Lotteries) – These are considered a form of gambling under UK law because they rely purely on luck. If you’re selling tickets for a draw, you might need a licence, depending on how you run it.
- Prize Competitions – These can legally avoid being classified as gambling if they include an element of skill (such as answering a question or solving a puzzle to enter).
The catch? That “skill” can’t be too easy. A simple “what’s 2 + 2?” style question probably won’t cut it. This is where most self-run competitions stumble into murky legal waters, inadvertently straying into unlicensed gambling territory.
The Risks of Getting it Wrong
Hoping to make easy cash without headaches? The reality check is important: the Gambling Commission monitors online competitions. If a raffle or prize draw doesn’t follow the rules, organisers can face fines or even criminal charges in extreme cases.
Even without legal action, payment platforms and social media sites have their own rules. PayPal and Stripe have both been known to freeze accounts linked to unlicensed raffles. And Meta’s policies technically prohibit promoting gambling — which not only applies to sports betting, casino and bingo sites but could include many of these competitions if they aren’t carefully structured.
The Grey Area Hustle – Is it Worth It?
That doesn’t mean you can’t run a successful competition — but it does mean you need to understand the law, structure your draws properly, and be prepared to do your homework. Many organisers use clever workarounds, like donating a portion of proceeds to charity (which some think adds legitimacy) or framing draws as private ‘members-only’ events. However, these are not legal loopholes — they’re just common misconceptions.
Top Tips if You Want to Run Your Own Raffle or Prize Competition
- Know Your Format – Is it a raffle (pure luck) or a competition (with a skill element)? This massively affects what rules apply.
- Get Advice – Speak to a legal professional or research directly on the Gambling Commission website before launching.
- Choose Payment Methods Carefully – Many standard payment processors prohibit payments linked to gambling. Explore alternatives, but read the small print.
- Keep It Private – Some organisers limit entry to a private members group, though this alone does not automatically make a draw legal.
- Be Transparent – Clearly explain your terms, refund policy, and how winners will be chosen to avoid disputes.
Final Thought: Glam Side Hustle or Legal Headache?
Self-run raffles and prize competitions are undoubtedly booming, and they can feel like an empowering, creative way to make money. But in the UK, a legal blind spot won’t protect you if things go wrong.
Juggling family life, careers, and creativity, a side hustle should feel fun and empowering — not a legal gamble. If you’re thinking of launching one, do your homework, follow the rules, and go in with your eyes open.