The UK prize draw competitions market is witnessing a noteworthy shift, evolving from a diverse collection of small operators to a more unified and professionally regulated sector, according to a recent white paper from consultancy Rokker. As reported, merger and acquisition spending in the industry has exceeded £220 million to date.
Earlier in April, Rokker had estimated the annual revenue of the UK prize draw market to be £1.3 billion, with approximately 7.4 million active players and over 400 operators engaged in the sector.
The white paper revealed that there are now around 1,000 operators actively conducting prize draws, a significant increase from the 401 operators identified in a 2023 government study. Among these operators, only 195 have signed the newly established Voluntary Code of Good Practice, which was launched on May 20, 2026. Additionally, 31 service providers are designated as “other relevant signatories.” This means that less than 20% of the estimated active operators have opted into the code, reflecting its partial adoption.
The Voluntary Code was introduced by the Department for Digital, Culture, Media and Sport (DCMS) as a means for self-regulation since prize draws currently do not fall under the Gambling Act 2005 and therefore lack oversight from the Gambling Commission. Legal experts have characterized this code as a beneficial step for operators, enhancing their reputations and preparing them for possible mergers and acquisitions, as prospective buyers often conduct regulatory due diligence before making purchases. Rokker noted that operators complying with the code are seen as more appealing targets for acquisition due to their robust compliance systems.
Numerous significant transactions have contributed to the sector's consolidation. For instance, Winvia acquired Best of the Best for £45.3 million in 2023, Click Competitions for £16.4 million in 2025, and Rev Comps for £11.8 million in 2026. Jumbo Interactive also made notable purchases, acquiring Dream Car Giveaways for £65.8 million and Dream Giveaway USA for £28.3 million in October 2025. In July, ZEAL Network entered the UK market by acquiring SevenCanyon and related businesses for £38.6 million. SevenCanyon operates several established UK digital prize draw websites, including 7days Performance and Redline Competitions.
The growth of affiliate and directory sites that direct players to prize draw operators was also highlighted. Although tracker sites are emerging to catalog operator data, ticket sales, and odds, this affiliate segment is still in its early stages compared to regulated iGaming, with much less transparency regarding operator relationships and payment structures.
Rokker anticipates continued consolidation in the market, driven by well-capitalized players employing both acquisition and organic growth strategies. Smaller operators that fail to invest in compliance or tax strategies may face pressure to find exit solutions amid increasing regulatory and operational challenges.
Ben Gale, a partner at Qualstels, noted that the code serves as a baseline for buyers assessing whether a business is ready for heightened scrutiny. "Buyers are utilizing the voluntary code as a ready-made framework," he remarked in a recent commentary.
Additionally, the recent creation of the Prize Competition Council (PCC) trade body adds a new layer of institutional sophistication to the sector. PCC membership fees range from £24,000 annually for operators with a turnover exceeding £50 million, to £250 for those with turnover below £2 million, while associate service providers pay a fee of £2,500.
Another source of uncertainty for prize draws arose from HMRC’s public clarification in February 2026, which stated that paid-entry prize draws with a free-entry alternative would not qualify for certain VAT exemptions applicable to games of chance. HMRC indicated that these paid entries should incur VAT at the standard 20% rate, mandating that raffles must include historical VAT in upcoming tax liabilities. Rokker indicated that HMRC has been urging operators to reevaluate their historic VAT positions, and at least one major operator is officially challenging HMRC's stance through a tax tribunal, with hearings scheduled for autumn 2026 and a decision anticipated by spring 2027.
DrawHouse, a B2B prize-draw platform, has expressed concern that these changes in VAT regulations could decrease operator margins by 25% to 30%, exposing them to significant retrospective tax liabilities.
The introduction of tax uncertainty and prospects for future regulations are influencing deal valuations and terms within the sector. For example, ZEAL Network reportedly settled for a lower acquisition multiple for SevenCanyon after considering potential VAT obligations and obtaining insurance-backed guarantees for historical tax liabilities. Rokker concludes that firms equipped with strong legal, tax, and technology resources are better positioned to navigate these challenges and pursue growth through consolidation strategies.
