With low cost-per acquisition costs, and a growing interest among key millennial demographics, prize draw competitions have become extremely complementary to traditional igaming, a white paper by Rokker consultancy group has suggested.
In ‘The Evolution of Prize Draws’ report, published last week, Rokker reported the UK prize draw market was worth £1.3 billion in annual revenue, with 7.4 million active players and over 400 active operators in the market.
Data cited in the white paper suggested that 88% of prize draw participants also participated in commercial gambling activities and lotteries over a 12-month period, making it a huge opportunity for cross-sell.
Additionally, the core audience for the product is both males and females aged between 25 to 65, capturing a huge millennial and Gen Z audience, which is otherwise under-served in iGaming.
“Participation is typically driven by low-cost entry, aspirational outcomes and entertainment value rather than purely odds-based decision making. As a result, prize draws provide iGaming operators and affiliates with access to a complementary, less saturated audience segment, with opportunities for more cost-efficient acquisition,” the white paper noted.
M&A opportunity as Flutter invests in prize draws
An increase in M&A activity was also cited in recent years, as leading prize draw operators have sought to consolidate the already saturated market. Among the deals, Flutter in 2024 helped fund a prize draw start-up as part of its Gaming Innovators competition.
Then in 2025 the iGaming giant invested in prize draw platform Rafflee, which launched in the UK in the same year.
German lottery brokerage Zeal Network has also invested substantially in prize draws and operates a number of products in its home country.
In its FY25 earnings call in March, Zeal CEO Stefan Tweraser told analysts the operator was considering investments in additional social lotteries and possible prize draw opportunities outside of Germany.
Voluntary code comes into force in May
Prize draw operators are not bound by traditional lottery regulations in the UK. Instead, a voluntary code was introduced in November by the government’s Department for Culture, Media and Sport (DCMS).
Although the code, set to come into force in May, will provide guidelines for prize draw operators, the DCMS emphasised it is not legislation and will not be legally binding for operators. It will also not replace existing regulations on issues such as consumer law, advertising and data protection.
The traditional lottery sector has for some time fought for prize draws – which have exploded in popularity – to face the same regulatory framework under the Lotteries Act.
Andrew Rhodes, outgoing CEO of the Gambling Commission, has previously suggested prize draws could be cannibalising traditional lotteries.
Considering the heavy 40% tax burden that iGaming operators face in the UK, the white paper highlights the 0% tax rate faced by prize draws as another opportunity for iGaming operators to enter the space.
“While voluntary code compliance will likely introduce additional costs, it effectively acts as a ‘protection fee’ helping the sector avoid tighter intervention from the Gambling Commission – making businesses more appealing to potential investors,” the report read.
Rokker believes the market is now ripe for investment due to its extremely fragmented nature and because it currently sits outside of UK Gambling Commission regulation, which might not always be the case.
Original article: https://igamingbusiness.com/lottery/whitepaper-prize-draw-opportunity-uk-igaming/
