How to legally set up a raffle company in the UK

1. Register Your Business with Companies House

The first legal step in your raffle journey is registering a business entity with Companies House, the UK’s registrar of companies.

Why a Limited Company?

Operating under a limited company structure protects your personal assets in case of legal issues and is often seen as more professional and trustworthy by:

• Banks
• Insurance providers
• Payment gateway services

This legal structure is essential when you start applying for business services like banking or insurance, as many providers won’t work with sole traders in this industry.

How to Register

Registering a company online is fast and costs as little as £12. You’ll need:

• A company name (we’ll cover naming strategy next)
• A registered business address
• At least one director
• Shareholder information

Many of our clients were able to register their business and receive confirmation within 24–48 hours.

2. Choosing the Right Company Name

Naming your business is more strategic than creative in the raffle industry. Certain words can raise red flags with regulators and third-party services.

What to Avoid

Avoid including words such as:

• “Competition”
• “Raffle”
• “Prize”
• “Lottery”

These terms are associated with gambling and can complicate your applications for banking or payment processing.

What to Use Instead

We recommend using a neutral, general company name eg “Acme group”

You can still operate publicly under a trading name like “Acme Competitions”. This allows you to build a brand while keeping official paperwork clean.

One of our past clients, now a 6-figure raffle operator, avoided issues by naming their company generically while building a vibrant, niche-facing brand under their trading name.

3. Set Up a Virtual Business Address

A professional virtual address serves several functions:

• Keeps your home address private
• Satisfies Companies House requirements
• Adds credibility to your website and business documents

You will also need this address when:

• Setting up your business bank account
• Applying for payment gateways
• Registering your website domain

How to Get a Virtual address for a competition business

Google “virtual office address [your city]” and choose a provider like:

• Hoxton Mix
• Regus
• UKPostbox

It usually takes under 15 minutes to register. Plans start as low as £10/month.

4. Secure Business Insurance

Insurance is not just a safety net – it’s often mandatory for:

• Legal protection
• Cybersecurity

What Should It Cover?

Your policy should include:

• Public liability
• Professional indemnity
• Cyber insurance for protection against hacking, DDoS attacks, or data breaches

 

Where to Get It

Services like PolicyBee, Simply Business, and Superscript offer packages tailored to high-risk businesses

5. Legal Considerations for Competition Websites

Operating a competition site in the UK means walking a fine line between lawful promotions and unlawful gambling.

Avoiding a Gambling License

To stay compliant with UK laws:

• Offer a free entry option (usually postal)
• Clearly explain the rules and odds
• Display proof of prize ownership

Your terms and conditions should:

• Be visible and accessible on every page
• Outline how winners are selected
• Specify how users can enter without payment

At Design Hero, we include legal policy templates for every raffle site we build, based on consultations with UK solicitors familiar with the Gambling Commission, and we also offer a referral service for a legal package from an approved lawyer.

Document Everything

You must retain proof of purchase for all prizes. Your payment processor will require this during onboarding and at any point of review.

6. Open a Business Bank Account

Many high street banks avoid raffle or prize competition businesses. That’s why we recommend these fintech alternatives:

• Cashplus – Commonly used, minimal red tape
• Wise Business – Great for international transfers
• Tide – Hit or miss, but works well for some

Tips on Applying for a bank account for a raffle business

• Register under SIC code 93290 (Amusement and Recreation)
• Avoid using restricted words in your description or company name
• Explain your business as “e-commerce” or “entertainment”

One of our clients secured banking approval by describing their business as “a digital entertainment platform offering promotional games.”

If you get rejected, don’t panic. Simply apply elsewhere. Persistence is key.

7. Set Up Your Payment Gateway

Payment gateway processors for competition sites are hard to come by . Unfortunately, traditional providers like Stripe or PayPal typically reject competition businesses due to their classification as a “High risk niche”

What is a Payment Gateway?

It’s the middleman between your website and your customer’s bank, enabling:

• Credit/debit card payments
• Apple Pay/Google Pay
• Fraud checks and chargeback protection

Preferred Providers for Raffle Businesses:

• Book a competiton clarity call with me and I may be able to refer you to our partners – we’ve built partnerships with gateways that specifically accept competition websites.

We’ve successfully launched sites using specialized providers vetted through client use, ensuring smooth onboarding and stable performance.

8. Build a Scalable, Brand-Driven Website

The best competition sites should:

• Be fast, secure, and mobile-friendly
• Clearly communicate how to enter
• Display prizes with trust-building content (videos, receipts, testimonials)

At Design Hero, we help you:

• Create a high-converting funnel
• Set up referral programs and upsells
• Add gamification (bonus draws, loyalty points, etc.)

One of our clients increased conversions by 35% after implementing our UX improvements.

9. Marketing & Scaling Strategies

Once your business is up and running, the next step is getting traffic.

Proven Strategies from Past Clients:

• Meta Ads: Target niche audiences like car lovers or gadget geeks
• Email Marketing: Build excitement before launching new draws
• Affiliate Influencer Collabs: Use micro-influencers to build buzz organically

Scaling isn’t about spending more. It’s about tracking, optimizing, and retargeting.

Our top-performing raffle clients:

• Track ROI by prize type
• Split test landing pages weekly
• Use urgency (limited entries, timers) to boost sales

Final Thoughts

Starting a raffle business in the UK is completely doable with the right setup and support. We’ve helped over 50 entrepreneurs launch competition websites, many of whom now run 5- and 6-figure operations.

Your legal business setup is just the beginning.

The real growth comes when your brand, platform, and marketing strategy align.

✅ Get your structure right

✅ Partner with specialists in the niche

✅ Avoid common startup mistakes

Need help launching your raffle business?

👉 Book one of my competition clarity calls for a free consultation.

FAQs

Q: Can I run a raffle website from home?

Yes—but use a virtual business address to protect your personal information and meet legal obligations.

Q: Do I need a license to run a competition site?

Not if you offer a valid free entry route and comply with UK regulations. Still, legal consultation is strongly advised.

Q: How fast can I start?

With Design Hero, your business entity, branding, and website can be up and running in 2–4 weeks depending on your goals.

Q: What’s the biggest reason raffle businesses fail?

Lack of trust and poor marketing. Success hinges on transparency, branding, and targeting the right niche.

Q: Can you help me with payment gateways that actually work for raffles?

Yes, we have direct contacts with providers who understand and accept the competition business model.

👉 Visit Design Hero’s Raffle Website Services to launch your business the right way.