Quick answer: A prize competition site makes its money from the gap between ticket sales and prize costs: sales fund the fixed prize pool, and the margin covers operations, payment processing, eligibility checks and marketing. Pool sizes and entry numbers are published before a game opens, so the model is visible to players.
Key takeaways
- Ticket sales are the incoming money on most sites: they cover the fixed prize pool first, and everything else is paid from what remains.
- The margin pays for real costs, including payment processing, hosting and game development, age and identity checks, prize delivery, support and marketing.
- The published numbers let you judge a game before entering: the full prize pool, the price per entry and the number of entries the draw allows.
See that transparency in practice: every MrRaffle game publishes its prize list and how many prizes are left, and new players can claim free tickets to look before spending anything.
What is the business model of a prize competition site?
Sell entries, pay the advertised prizes, keep a margin to run the platform. Entry prices, prize values and, on most sites, the entry count are published, so the relationship between money in and prizes out is checkable before you take part.
The basic arithmetic is revenue minus costs:
- Revenue is entries sold multiplied by the price per entry.
- Costs are the prize pool plus the cost of running the site.
- The margin is what remains, and it is the classic retail shape: buy the prizes, sell the entries, cover the overheads.
Two differences matter to players. First, the prize pool is fixed before the game opens, so the top prize does not shrink if fewer entries sell than planned. Second, on paid draws decided wholly by chance, UK rules require a free entry route, so the model has to work even when some players never pay. MrRaffle runs both paid games and free routes, and its how it works page sets out the entry routes plainly.
How is the prize pool funded?
The prize pool is funded from ticket sales and fixed before the game opens: the operator commits to the prizes first, and every entry sold then contributes to covering them. Games sell a set number of entries, or run to a closing date, against that fixed pool.
An illustrative draw, our own numbers: 10,000 entries at 50p brings in £5,000. With a prize pool of £3,500, the remaining £1,500 has to cover delivery, payment fees, checks, support and operations. Those figures are illustrative to show the structure, and real games differ. The published prize table is the commitment: it is set before the game opens, and on MrRaffle the game page also shows how many of each prize are still available. How a prize table is designed explains the thinking behind those numbers.
Where does the rest of the money go?
The margin covers the running costs of the platform: payment processing on every entry, hosting and game development, age and identity checks, prize delivery and fulfilment, customer support, and the marketing that brings in players. Few sites itemise these costs publicly, but they are why a site cannot simply pay out every pound it takes in.
| Cost line | What it covers |
|---|---|
| Payment processing | Card and wallet fees on every entry, won or not |
| Platform | Hosting, game development, security and maintenance |
| Checks and compliance | Age, location and identity verification for winners |
| Prize fulfilment | Buying, storing, insuring and delivering prizes |
| Support | Answering player questions and resolving issues |
| Marketing | Reaching new players, which keeps pools full |
Every line above is a real cost of doing business, and together they explain why the gap between entries sold and prizes paid is a working margin rather than spare profit.
Why do sites run instant games as well as big draws?
Instant games and big draws serve different players: instant games offer small, frequent prizes at low prices, with a result at the moment of play, while big draws concentrate value into headline prizes such as cars. Running both covers both appetites.
The economics differ too. Instant games settle quickly, show the prize pool and remaining counts in real time, and suit small budgets. Big draws run for longer, build a bigger pool, and often carry higher price points. For players, the useful consequence is choice: a low priced instant game and a car draw can be judged on the same published numbers, prize pool against entries, and you can pick the shape that suits you. The instant win games page is built around that idea.
How does the model affect players?
It gives you three numbers worth checking: the size of the prize pool, the number of entries against it, and what the terms say happens if a draw does not sell out. Together they say more about value than any headline prize.
Because the pool is fixed, a draw that sells fewer entries than planned does not shrink its prizes. What happens instead is written into the terms, which may allow an extension or a cancellation with refunds: what happens if a competition does not sell out walks through those clauses. The other half of the picture is the free route: on paid draws decided wholly by chance, a free postal entry carries the same chance as a paid one, so the model still works for players who never spend. And where a game publishes the numbers in full, how expected value works in competitions shows how to read them without hype.
Judge the model on the numbers: the how it works page sets out MrRaffle's entry routes and how prizes are funded and awarded.
What questions should you ask any competition site?
Six questions do most of the work: what is the full prize pool, how many entries can be sold, what happens if it does not sell out, what is the price per entry, is there a free entry route, and who operates the site.
- The full prize pool. Not just the headline prize: the whole table, including the smaller prizes.
- The entries in play. The pool divided by the entries is the simplest read on your chance.
- The sell-out clause. The terms should say what happens: run as normal, extend, or cancel with refunds.
- The price and the free route. On paid chance based draws, a free route has to exist, and it should be easy to find.
- The operator. A company name and number is a basic check, along with a real contact route.
- The results. A completed draw should produce results that anyone can find afterwards.
A site that answers all six clearly is giving you the information the model runs on. If a site cannot answer them, that is useful information too.
If you want to see the answers in one place, claim free tickets on MrRaffle and compare a live game against the checklist above.
Frequently asked questions
How do prize competition sites make money?
From the margin between ticket sales and prize costs. Sales fund the fixed prize pool first; what remains covers payment processing, platform costs, checks, prize fulfilment and marketing. Sites that publish pools and entry numbers make that structure checkable.
Do competition sites keep money if a draw does not sell out?
It depends on the terms. Some draws run whatever happens, some extend the closing date, and some cancel with refunds. The specific competition's terms state which applies, so that clause is worth reading before you enter.
Do sites make money from instant win games?
Instant games run on the same principle: entries fund a fixed prize pool, and the margin runs the platform. Their economics lean on lower prices and higher turnover, while big draws concentrate value into fewer, larger prizes.
Why do sites offer free entries if ticket sales fund the prizes?
On paid chance based draws, UK rules require a free entry route, so paying is always optional. Free entries also reach players who would not pay, and the pool still works the same way when they take part on the free route.
How can you check where a site's money goes?
Start with the terms and the prize table: both are published before a game opens. Results after a draw close are the second check. A site that publishes pools, entry numbers and results is giving you the numbers that matter.
Sources
- MrRaffle: how it works, MrRaffle, accessed 7 October 2026
- MrRaffle Competition Terms and Conditions, MrRaffle, accessed 7 October 2026
- Promotional marketing: Free entry routes, ASA and CAP, accessed 7 October 2026
- Voluntary code of good practice for prize draw operators, DCMS, accessed 7 October 2026
Play responsibly
MrRaffle is for UK residents aged 18 and over. Only play with money you can afford to spend, set a budget before you start, and take a break if it stops being fun.
See the numbers for yourself: read the how it works page for the entry routes, check the competition terms for how prize pools and results are handled, or claim free tickets and start with a free play.
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