What a Value Ratio Means for the Operator, After VAT

This is a guest post by Ivan Soloviov of The Lottery CFO. Ivan has spent 18 years in lottery finance, including as CFO of a European national lottery operator. Our Value Ratio shows players what a draw charges against its prize. Here Ivan looks at the same number from the operator’s side.

Competition Showroom lists 132 UK competition sites and ranks 104 of them by a Value Ratio: ticket price times total tickets, divided by the cash prize. A ratio of 1.00 means ticket sales at sell-out exactly cover the prize. As of November 2026, the median operator scores 2.66. For players, lower is better.

For the operator, the same number answers a different question: at what ratio does a draw stop losing money?

Gross Is Not Net

The ratio counts every ticket at full price. Between that and the operator’s profit sit:

• Unsold tickets. The ratio assumes a sell-out.
• Free entries through the free entry route. Here, 5% of entries.
• Payment fees. Here, 2% of paid sales.
• Other costs: marketing, platform, the draw itself. Here, 15% of the prize value.

And, if HMRC’s view holds, VAT at 20% on paid entries for VAT-registered operators: one-sixth of every paid pound. HMRC’s view is being challenged by Omaze at the First-tier Tribunal, with a decision expected in spring 2027. (We covered the case in Omaze v HMRC: the VAT tribunal.)

The Break-Even Value Ratio

Tickets sold	Without VAT	With VAT (HMRC’s view, VAT-registered)
100%	1.24	1.49
85%	1.45	1.75
70%	1.76	2.13
50%	2.47	2.98

Under HMRC’s view, a draw that sells out needs a ratio of about 1.5 just to cover the prize and its costs. One that sells 70% needs about 2.1.

At the median ratio of 2.66, a sold-out draw makes about 53% of paid ticket sales before VAT. Under HMRC’s view, VAT would take up to about 17 points off that, leaving about 36%. At 70% sold, the same draw makes about 33% before VAT and about 16% after. At 50% sold, a small profit of 7% becomes a loss of about 10%.

What It Means

The ratio players reward and the ratio that keeps an operator in business are moving closer together. A low ratio is only good for anyone if the operator can still afford to award the prize, whatever the sales. That is set before launch: the price, the cap and the prize, judged against the sell-through a site has actually achieved, not the one it hopes for.

Hypothetical figures for illustration; your own costs and sell-through will differ. Percentages are of paid ticket sales, including VAT; input VAT recovery is ignored. Finance modelling, not tax advice. 18+.

Editor’s note: the site counts and median Value Ratio above were correct when Ivan wrote this piece. They change daily as draws open and close; see our operator directory for the live figures.

Ivan Soloviov, The Lottery CFO: 18 years in lottery finance, including as CFO of a European national lottery operator. thelotterycfo.com