Jumbo Interactive is calling for greater regulation on the prize draw and competition market after research it conducted found that £117m was racked up in credit card spending due to unregulated prize draws and competitions.
Produced from a representative sample of 4,000 UK residents, the research also uncovered that one in ten people who enter prize draws, which offer the chance to win prizes such as cars or houses, ended up in debt as a result.
Despite legislation passed through Parliament banning the use of credit cards for gambling in April 2020, it is estimated that £860m has been paid to enter the so-called ‘free’ prize draws since then.
This is because, for the prize draws, they offer ‘free’ entry methods, where it’s possible to play by post for the cost of a postage stamp. As a result, it does not breach the legislation passed last year as it is not considered gambling.
Nigel Atkinson, UK General Manager, Jumbo Interactive commented: “A huge amount is being spent on credit cards on prize draws, pushing people into debt – despite the free entry option being the reason they are exempt from oversight.
“With so much money changing hands, the government needs to look at the proper regulation of prize draws and competitions to better protect consumers.”
Furthermore, the research found that 45% of people are more likely to enter competitions and prize draws if there is a promise of a charitable donation.
As a result, 57% of players have entered prize draws and competitions claiming to donate a percentage of their entry’s funds to charity, without checking what goes to the cause.
Tony Vick, Chair of The Lotteries Council, added: “The Lotteries Council is increasingly concerned about the use of prize draws operated by commercial gambling companies which are marketing themselves in a similar way to charity lotteries.
“Lotteries face a series of legislative hurdles that restrict our ability to grow and raise funds for good causes while prize draws face no limits on how many tickets they can sell, what prizes they can offer, and choose whether and how much to give to any charity. We hope the Government looks at this to ensure a fairer playing field.”