Business development · 11 October 2018

The difference between a raffle and a prize draw

A raffle is another name for a lottery, which must be run for a good cause

Before launching a promotional prize draw, it’s crucial to understand the legal implications of the terminology. Grid Law founder David Walker helps one reader start their own competition website by explaining the difference between a raffle and a prize draw.

Question

I have read through your article on running promotional prize draws and I am looking to start my own website running them regularly. I was wondering, do you know if I would be allowed to use the word “raffle” in the name of the site?

Thanks

Answer

Thanks for your question.

If you are running the prize draws (or competitions) for commercial purposes, I would avoid using the word “raffle” in the name.

Whilst some people might think of the word as a generic term for prize draws and competitions, strictly speaking, it’s not. A raffle is another name for a lottery, and lotteries should only be run for good causes such as for charities and other not-for-profit organisations.

Read other guides around promotional prize draws:

If you use the word “raffle” in the name of your website or describe the prize draw as a raffle this could be misleading. People may think that by entering your prize draw they are donating to good causes.

I’m aware that some businesses do describe their prize draws as a raffle. For example, McCain ran their “Great Village Raffle” promotion as a prize draw. This prize draw was very controversial in its own right as serious issues were raised regarding the allocation of prizes.

It doesn’t appear that anyone complained about the use of the word “raffle” in the name but this doesn’t mean that they were allowed to use it. If there hadn’t been other, serious issues with the prize draw, complaints could have been received and action could have been taken against them.

I hope this helps and please feel free to email me again if you need any further advice.

Kind regards

David

McCain’s raffle controversy

Oven chips brand McCain Foods faced criticism in March 2018 following a promotional “raffle” in which fewer than 1% of advertised prizes were picked up by winners.

An investigation by BBC Radio 4’s You and Yours show found that just 160 of the 28,815 prizes were won, with just four VIP experiences awarded to winners. No cars were won in the promotion.

McCain Foods told the show: “The Great Village Raffle promotion clearly stated on packaging and in the terms and conditions that prizes were available to be won, not guaranteed, and was approved by the Institute of Promotional Marketing. We listen to consumer feedback however and won’t be running this type of promotion again.”

Di Coke, a consumer blogger and serial competition entrant, labelled the promotion “cynical”. She told the BBC: “Ridiculously extreme figures like ‘£3m of prizes’ just aren’t necessary to get people interested – and when those prizes are advertised but not awarded, consumers lose their trust in a brand.”

The Advertising Standards Authority (ASA) received four complaints regarding the promotion since it began in January 2017, and McCain Foods announced it would not run similar campaigns in the future.

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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