The UK Skill-Based Prize Competition Market: Key Considerations for Merchants

Skill-based prize competitions are an increasingly popular way for UK businesses to engage customers. These competitions typically involve customers paying for an entry after completing a question or other game of skill, for the chance to win a prize.

As the market grows, merchants are placing greater focus not only on customer experience, but also on the operational and compliance considerations that come with running competitions at scale.

A Growing UK Market

Demand for interactive, experience-led purchasing journeys has driven steady growth in the UK skill-based prize competition sector. Merchants across a range of industries are using competitions to build engagement, encourage repeat participation, and stand out in competitive markets.

With this growth has come increased scrutiny and higher expectations around how competitions are structured, promoted, and managed.

Common Challenges for Merchants

Despite the opportunity, merchants in this space often face a familiar set of challenges.

Compliance considerations

Ensuring a competition operates in line with UK requirements is a key consideration. This is not a one-off exercise, but an ongoing operational focus as volumes increase and business models evolve.

Platform and payment limitations

For many merchants, particularly those using Shopify, payment processing options for skill-based competition models have historically been limited. This has made it harder to offer preferred payment methods or scale without friction.

Customer trust and payment experience

A smooth, transparent payment journey is critical. Limited payment choice or unreliable checkout flows can quickly affect customer confidence.

The UK Regulatory Landscape

Skill-based prize competitions in the UK operate within a clearly defined regulatory framework.

Merchants in this space will often reference:

• The UK Gambling Commission, which sets out how prize competitions and free draws are distinguished from regulated gambling.
• The Advertising Standards Authority (ASA), which oversees how competitions are marketed and communicated to consumers.

There are also well-established expectations commonly associated with skill-based competitions, including transparency around entry mechanics, fairness, and the availability of free entry routes, such as free postal entry.

Given the nuances involved, merchants often consider seeking independent legal advice or a legal opinion to ensure their specific competition model aligns with UK legislation and advertising standards.

Compliance as an Operational Reality

Beyond legal interpretation, compliance is closely tied to day-to-day operations.

Merchants typically need to consider how entries are accepted, how payments are processed and reconciled, how winners are selected, and how outcomes are communicated. As part of this, many businesses choose to work proactively with their payment processor to ensure their payment flows support their competition mechanics.

Payments for UK Merchants and Customers

For businesses selling to UK customers only, payment choice remains a core part of both customer experience and operational confidence.

Offering card payments alongside Pay by Bank allows merchants to meet customer expectations while keeping checkout simple and familiar.

Boodil supports UK skill-based prize competition merchants by enabling both card payments and Pay by Bank for UK customers. This helps businesses offer flexible payment options while maintaining clear and reliable payment processing.

Supporting Shopify and Beyond

As the sector matures, improved support is becoming available for merchants operating skill-based prize competitions across different platforms.

Solutions such as Boodil help address the historic limitations around payment processing on Shopify, whilst also supporting merchants on other platforms or bespoke builds. This reduces reliance on workarounds and allows businesses to focus on growth.

As interest in skill-based prize competitions continues to grow, merchants that take a considered approach to structure, compliance, and payments are best placed to succeed. By understanding the regulatory landscape, planning for operational realities, and offering payment experiences that meet UK customer expectations, businesses can build competitions that are engaging, scalable, and trusted over the long term.