Key Points to Consider When Starting Your Own Online Raffle Business

Online raffle sites have become one of the most popular ways to win cars, cash, tech and holidays in the UK. If you're thinking of starting one, this guide takes you through it step by step: the legal setup, your company, payments, the website, your first raffles and how to market them.

What is a raffle business?

A raffle business runs prize draws online. Players buy tickets for a prize, such as a car, a holiday or a cash sum, and a winner is drawn at random when the raffle closes. Many sites also run instant win raffles, where some ticket numbers win a prize straight away. You'll see the same model called "online competitions" or "prize draws". The way it works is the same.

Your income is the money from ticket sales. Your costs are the prizes, payment fees, your website, marketing and the time it takes to run everything. Whether a raffle covers its costs comes down to the prize, the ticket price and how many tickets sell, so the planning matters.

Is it legal to run raffles as a business?

Yes, if it's set up properly. Under the Gambling Act 2005, an arrangement where people pay to enter and the winner is picked purely by chance is a lottery, whatever you call it, and a business can't run a lottery for its own profit. UK raffle sites stay outside that definition in one of two ways:

• A prize draw with a free entry route. Players can enter for free, usually by post, on the same terms as a paid entry. This is how most raffle sites work.
• A prize competition that needs real skill. Winning has to depend on skill, judgement or knowledge. An easy question doesn't count.

Set up this way, you don't need a Gambling Commission licence. We explain the detail in are online raffles legal in the UK? and do you need a licence to run a raffle website?

Step 1: Choose your niche and your audience

The raffle sites that grow fastest usually know exactly who they're for. Some focus on cash and instant wins, others on cars and bikes, luxury items, family days out, or a hobby like fishing, golf or gaming. A clear niche makes your prizes, your branding and your adverts easier to get right.

Ask yourself who you want to sell to, what prizes would excite them, and where they spend time online. For inspiration, see our raffle prize ideas.

Step 2: Set up the business

• Choose a structure. You can trade as a sole trader, registered with HMRC for Self Assessment, or set up a limited company through Companies House. An accountant can tell you which suits you, and how tax and VAT apply to your ticket sales.
• Pick a name and check it. Check it's free at Companies House, that it doesn't clash with a trade mark, and that you can get the domain and social handles. Our guide to naming a raffle business covers the checks and the words to avoid.
• Open a business bank account. Not every bank is comfortable with raffle businesses, so ask before you apply.
• Register with the ICO. You'll hold player data, and most organisations that process personal information need to pay the ICO's data protection fee unless they're exempt.

Step 3: Get the legal setup right

This is the part that keeps your business safe, and it's what banks, payment providers and Meta will ask about.

• A free entry route on every raffle. It has to be a real choice, no more expensive and no less convenient than paying, shown clearly before purchase, with the same chance of winning. See the free entry route explained.
• Terms and conditions written for raffles, plus a privacy policy and cookie consent for your website.
• A legal opinion letter. A letter from a solicitor explaining why your raffles are set up properly. It isn't a licence, but banks, payment providers and Meta often ask to see one. More in what is a legal opinion letter?
• The DCMS Code. The government's Voluntary Code of Good Practice for Prize Draw Operators, published in November 2025, covers age checks, spending limits, limits on credit cards, how winners are drawn and how prizes are handled. It's voluntary, but it's now the standard players and partners expect. Our DCMS Code checklist takes you through it.
• Advertising rules. The CAP Code's promotional marketing rules apply to your adverts, and Meta asks raffle sites to get authorisation before running Facebook and Instagram ads. See how to get Meta approval for raffle ads.

Step 4: Sort out payments

Payments catch a lot of new raffle businesses out. Many payment providers don't accept prize draw businesses, and some only find out after you've launched. Before you build anything, confirm your provider accepts raffle sites in writing.

You'll also want a provider that can tell credit cards from debit cards, because the DCMS Code limits credit card spending to £250 a month per player and rules out credit cards on instant win draws. A fast checkout matters too, because many tickets are bought on a phone.

Step 5: Build your raffle website

A raffle site isn't a normal online shop. It has to allocate ticket numbers without overselling, handle free entries, run random draws and instant wins, apply age checks and spending limits, and cope when everyone arrives at once on draw night.

You can use a general website builder, WordPress with a raffle plugin, a dedicated raffle platform or a custom build. We compare them in raffle website builders in the UK compared, and our guide to raffle websites covers what a good site needs.

Step 6: Plan your first raffles

• Prizes. Pick prizes your audience wants, describe them accurately, and make sure you can deliver every prize you advertise.
• Ticket price and ticket numbers. Work out what a raffle needs to sell to cover its costs, and set the numbers so it can realistically sell out. See how to price raffle tickets.
• Closing dates. Leave time for postal entries to arrive, and don't move the end date once a raffle is live.
• Instant wins. They're popular, but the DCMS Code says they shouldn't be the majority of your raffles at any time. More in instant win raffles explained.

Size each raffle so you're comfortable running it to the end whatever sells. The DCMS Code says you shouldn't lower a prize or cancel a draw because ticket sales are low.

Step 7: Run fair draws and show the results

Trust is everything in this business. Pick winners with a process that's verifiably random and auditable, such as an automatic draw from your raffle system, which you can still reveal live on social media. Publish how your draws work, post winners on your site, and keep a record of every draw in case anyone asks. See how to pick a raffle winner fairly.

Step 8: Market your raffles

Most raffle businesses grow through a mix of social media, paid ads, email and SMS, live draws and word of mouth from happy winners. Only send marketing emails and texts to people who've agreed to receive them, keep your adverts within the CAP Code, and never suggest a raffle is a way out of money problems. Our raffle marketing ideas cover 12 ways to sell more tickets the right way.

The costs to plan for

• Prizes, usually the biggest cost
• Payment processing fees on every ticket sale
• Your website or platform
• The legal setup, including terms and a legal opinion letter
• Marketing and adverts
• An accountant, and delivery costs for physical prizes

How much you need depends mostly on the prizes you start with. Many owners start with smaller prizes and build up as their audience grows.

Common mistakes to avoid

• Choosing a payment provider that doesn't accept raffle businesses
• Hiding the free entry route in the terms and conditions
• Launching with a prize too big to sell out, then being stuck with it
• Changing closing dates or prizes once a raffle is live
• Running Facebook and Instagram ads without Meta authorisation
• Not keeping records of draws and postal entries

How Reffle helps you start

Reffle sets up your raffle business with you: a raffle website built in your brand, Reffle Pay for card payments, a legal opinion letter from our solicitor and terms written for raffle sites, help getting approved to advertise, and marketing tools and an app to grow your players. Every Reffle site has the free entry route and the DCMS Code features built in, and Reffle is a signatory to the Code. We've helped 150+ raffle businesses launch.

If you're thinking of starting, book a free demo and we'll give you straight answers, including whether Reffle is the right fit for you.

Questions people ask

Do I need a licence to start a raffle business?

Not if your raffles run as prize draws with a proper free entry route, or as competitions that need real skill. A business can't run a lottery, which is why the setup matters.

How much does it cost to start a raffle business?

It depends mostly on your prizes. On top of those, budget for payment fees, your website, the legal setup and marketing. Starting with smaller prizes keeps the risk down while you build an audience.

Can I run a raffle business alongside a job?

Yes, it can start as a side business. The workload depends on how many raffles you run. Automatic draws, scheduled emails and a platform that handles tickets and free entries keep it manageable.

Do I need to buy the prize before I launch a raffle?

You need to be able to deliver every prize you advertise, whatever sells. The DCMS Code says you shouldn't swap in a cheaper prize or cancel a draw because sales are slow, so plan how you'll fund each prize before it goes live.

This guide is general information, not legal, tax or financial advice. Sources: Gambling Act 2005, section 14 and Schedule 2 (legislation.gov.uk); DCMS Voluntary Code of Good Practice for Prize Draw Operators (gov.uk); ASA advice on free entry routes and the CAP Code, section 8 (asa.org.uk); ICO guidance on the data protection fee (ico.org.uk); GOV.UK guidance on setting up a business. Last checked October 2026.