The UK prize draws and competitions (PDC) sector is undergoing significant changes that are altering the landscape for business sales within the industry. Recently, the Voluntary Code of Good Practice for Prize Draw Operators was fully implemented, coinciding with the launch of the Prize Competition Council, the first trade body dedicated to this sector. These developments reflect a market that is becoming more organized and appealing to discerning buyers.
Historically, businesses within this sector operated in a more entrepreneurial environment, lacking a government-endorsed framework or a trade association. When transactions occurred, such as the 2025 sale of Click Competitions to Winvia Entertainment, the compliance landscape was less defined, leading to varying degrees of due diligence and awareness of buyers’ expectations.
Since the Voluntary Code took effect in May 2026, buyers have begun to adopt its standards to assess businesses, even before it was formally enacted. Initial transactions following this regulatory change show buyers increasingly emphasize compliance in their due diligence processes.
In the past, due diligence followed a familiar outline, covering corporate structure, contracts, intellectual property, employment, data protection, regulatory history, and tax implications. While some sector-specific concerns, such as free entry mechanisms and payment processing, were addressed, the depth of compliance scrutiny varied without any outside standard to define “good” practices. Now, buyers are integrating compliance inquiries into their initial evaluations, focusing on aspects related to the Voluntary Code such as self-exclusion tools, age verification, and player harm monitoring systems.
These new compliance inquiries represent more than superficial questions. They are seen as critical elements in negotiations. For example, inadequacies in compliance can significantly affect a business's valuation, prompting buyers to seek more stringent contractual protections.
Tax compliance has also gained heightened scrutiny, especially concerning VAT. In February 2026, an HMRC statement clarified that paid entries to prize draws with both paid and free entry routes are subject to a standard VAT rate of 20%, indicating that buyers are now investigating each business’s historical VAT treatment more closely.
The establishment of the Prize Competition Council on July 1, 2026, marks a notable step toward institutional maturity within the sector. With more than 50 operators uniting under this association, the Council aims to promote integrity, transparency, and player protection. This collective representation suggests that operators are eager to abandon regulatory ambiguities in favor of shaping their standards and public perception.
Although it is still too soon to evaluate the immediate effects of the Council on business transactions, its formation highlights a trend toward higher standards in the market. This shift benefits compliant operators but poses challenges for those who have not built adequate compliance frameworks.
Larger operators will likely continue to excel as compliance costs escalate, as they can absorb these expenses more efficiently. In contrast, smaller operators face relatively higher compliance costs and resource allocation issues, raising questions about their future, particularly regarding potential acquisitions by larger companies.
ZEAL Network SE’s recent acquisition of SevenCanyon, valued at around £33.8 million, exemplifies this trend. ZEAL, a leader in the online lottery sector in Germany, views its compliance capabilities as a strategic advantage in establishing itself in the UK market. Similarly, Winvia Entertainment, which manages Click Competitions and BOTB, has reported significant growth, attributing part of this to disciplined acquisitions and a proactive compliance strategy.
Looking ahead, the interplay of evolving regulations, escalating compliance costs, and the interest of well-capitalized buyers creates fertile ground for ongoing consolidation. The market remains fragmented, with a widening gap between well-prepared and poorly prepared operators.
For potential sellers, it’s crucial to recognize that the market is active with sophisticated buyers who have clear mandates for compliance. Proactively addressing compliance issues has become essential for securing an advantageous sale that maximizes business value. As the average buyer’s expectations evolve along with the Voluntary Code and the establishment of the Prize Competition Council, sellers who adapt quickly will be best positioned to achieve favorable transactions and valuations.
Ben Gale, a partner at Quastels, specializes in mergers and acquisitions, focusing on the online prize draws and competitions sector, having advised on significant transactions including the sales of Click Competitions and Rev Comps.
This piece serves to provide the industry with insightful trends and does not constitute legal advice nor reflect any specific transaction.
