How to host a competition for your business (and stay legal in the UK)

Running a prize competition is one of the fastest ways for a business to shift stock, grow an audience, and make some money in the process. The bit that scares most owners off is the legal side. The good news: when you host on luckladder, the platform is structured to keep the draw compliant with UK law, so you can focus on the prize and the promotion. Here is how it works.

Why run a competition for your business?

A draw turns a single prize into a stream of ticket sales and a burst of attention. It is a great way to clear unsold stock, launch a new product, reward your following, or simply raise cash using stock you already have. Done right, it can be a real source of revenue for your business and a great way to grow your audience.

The legal bit, in plain English

In the UK, the line you need to stay on the right side of is between a lottery and a prize competition. A lottery is a game of pure chance that you pay to enter, and running one without the right licence is illegal. A prize competition is legal without that licence as long as it is structured correctly, including a free entry route where tickets are sold for money.

Getting that structure right is fiddly, and it is exactly the part luckladder handles for you. Every competition on the platform is set up to comply with UK competition law, including a free postal entry route, so you are not left guessing whether your draw is legal.

This is general information, not legal advice. If your draw is large or unusual, it is worth getting your own professional advice too.

Do I need a licence?

For a properly structured prize competition, no. That is the whole point of running it as a competition rather than a lottery. Because luckladder sets each draw up to meet those requirements, you can host as a business without applying for an operating licence yourself.

How to host on luckladder

1. List your prize. Upload photos and fill in the competition form: title, description, prize value and max payout, draw date, and location. The prize stays yours until someone wins it.

2. Set your payout. To figure out the max payout, calculate the market value of the prize and add some buffer on top. We reccomend not marking up the prize value too much in order to keep your draw attractive for entrants.

3. Set up your payout account so you can receive your earnings once the draw is done.

4. Promote it. Share the draw with your customers, your email list, and your social following. The more you promote, the more tickets you sell. This is where having an existing audience really pays off.

5. Let the draw run. When the draw date hits or every ticket sells, the winner is picked automatically. You and the winner both get an email. Nobody picks winners by hand.

Getting paid and handing over the prize

After the draw you arrange delivery or collection. Once the prize has changed hands, you and the winner each enter your own verification code on the site to confirm the handover. Codes are not shared between you. Once both sides have confirmed, you can request your payout. That extra step means a clear record the prize changed hands, which protects your business as much as the winner.

On fees, hosts pay 4.9% on their payout. There is no markup taken on the value of the prize itself, and the numbers are shown upfront before you commit.

Who it works for

Shops with slow-moving stock, tradespeople, gyms, salons, cafes, online sellers, influencers, and charities all use prize draws to turn one item plus an audience into sales and attention, without building their own competition site from scratch. If you have something worth raffling and people who would enter, you can host.

Ready to get going? Head to create a competition to list your prize, or browse live competitions to see how draws are presented.