I used to work in the industry. 99.9% are perfectly legal, decent and honest, and in my time I've picked winners for TV shows, national and regional newspapers for competitions. I never came across a dodgy one (even on some shows that have been mentiones in the press).
However, it is not regulated enough, and the potential for greed and corruption is obvious, and easy to exploit. This is not just on a personal level but also as a company. It would have been easy for me to skim prizes for myself, but even easier for the company to skim thousands of pounds.
ICSTIS and the government have been far too slow to see the rise in PRN activity, and it has unfortunately taken a scandal for them to pull their socks up.