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What is a lottery?

Lotteries are one of the most popular types of gambling in the UK. Any type of competition or prize draw will be classed as a lottery if it has the following essential elements:

  • players have to pay in order to take part
  • one or more prize is allocated to one or more players
  • prizes are allocated by a process which relies wholly on chance

Lotteries are a good way to raise funds for charitable purposes although there are many restrictions covering these activities. A number of competitions could fall within the definition of a lottery, including raffles, tombola, sweepstakes, 100/200/500 clubs and prize draws.

For further information on Facebook raffles/lotteries, please see document below.

Facebook Lotteries

Lotteries can only be run to raise funds for good causes, they cannot be run for private or commercial gain.

Apart from the National Lottery, there are only four types of lottery which are legal:

Small Society Lotteries

Small Society Lotteries are held by a non-commercial society and require registration with the Licensing Authority in which the principal office of the society is located.

To be considered non-commercial the society must be established and conducted for: -

  • charitable purposes; or
  • the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity; or
  • any other non-commercial purpose other than that of private gain.

Furthermore the proceeds of any such lottery must be devoted to those purposes.

The total value of tickets to be put on sale per single lottery must be £20,000 or less, or the aggregate value of tickets to be put on sale for all their lotteries in a calendar year must not exceed £250,000.  If the operator plans to exceed either of these values then they will be classed as a large operator and must be licensed with the Gambling Commission.

How to apply - New Registrations

Please read Guidance - small society lotteries

  • The fee for new registration is £40.
  • The Licensing Authority will ask new applicants for a copy of their terms and conditions or their constitution to establish that they are a non-commercial society. It may also request applicants to provide a declaration, stating that they represent a bona-fide non-commercial society.

The following document provides more guidance on how to create an account and make an application.

Renewals

In order to remain registered as a small society lottery a fee of £20 must be paid within a period of 2 months which ends immediately before each anniversary of the initial registration and your statement of returns form(s) should have been submitted.

The following document provides more guidance on how to make an application.

Records and returns

Returns for each lottery must be completed and sent to the Authority within three months of each draw. You must show that at least 20% of the total proceeds raised have gone to the purposes for the society was created. If after receipt of the return it is apparent that the ticket sales are above the permitted limits for a small society lottery, the Authority will notify the Gambling Commission. A copy of that notification will be provided to the society.

Returns Form

Tickets and prize funds

Tickets must state:

  • the name of the promoting society
  • the price of the ticket, which must be the same for all tickets
  • the name and address of the member of the society who is designated as having responsibility for promoting small lotteries
  • the date of the draw

    Lottery tickets may only be sold by persons over the age of 16 and to persons over the age of 16.

    Rollover of prize funds are permitted as long as the total for any single prize does not exceed £25,000 or 10% of the proceeds of the lottery.

Incidental Lotteries

Incidental lotteries do not require registration with the local authority.

An incidental lottery is one that is incidental to a commercial or non-commercial event. The lottery must be promoted wholly for a purpose other than that of private or commercial gain. The event may last more than a single day.

Incidental lotteries must comply with conditions and includes the following :

  • the promoters of the lottery may not deduct more than £500 from the proceeds in respect of the cost of prizes 
  • the promoters of the lottery may not deduct more than £100 from the proceeds in respect of the cost of other expenses, such as the cost of printing tickets or hire of equipment
  • the lottery cannot involve a rollover of prizes from one lottery to another
  • tickets must only be sold at the premises during the event, and the result can be drawn at the event or after it has finished. It is recommended that the organisers of the lottery make it clear to participants when the result of the lottery will be decided.

Customer Lotteries

Customer Lotteries do not require registration.

A customer lottery is a lottery promoted by a person (the promoter) who occupies premises in Great Britain in the course of business. No ticket in the lottery must be sold or supplied to a person except at a time when they are on the business premises as customer of the promoter.

The Act requires that in customer lotteries:

  • the lottery must be arranged to ensure that no profit is made 
  • the price payable for each ticket must be the same, must be shown on the ticket and must be paid to the promoter of the lottery before any person is given the ticket
  • tickets may be sold or supplied only by or on behalf of the promoter
  • tickets must not be sold to children under 16 years of age
  • no advertisement may be displayed or distributed except on the business premises
  • another customer lottery cannot take place within seven days on the same business premises
  • tickets are non transferable
  • no ticket may result in the winner receiving a prize worth more than £50
  • no rollovers of prizes are permitted.

    Each ticket in a customer lottery must state:

  • the name and address of the promoter of the lottery
  • the price of the ticket
  • the person to whom the promoters can sell or supply tickets;
  • that the rights conferred by the sale or supply of a ticket in a customer lottery are non-transferable.

Private Lotteries

Private Lotteries do not require registration.

There are three types of private lotteries:

  • private society lottery
  • work lottery
  • residents’ lottery.

    Private lotteries must comply with conditions relating to advertising which state that no advertisement for a private society, work or residents’ lottery may be displayed or distributed except at the society or work premises, or the relevant residence, nor may it be sent to any other premises.

    Private lotteries must comply with conditions relating to tickets. In summary these are:

  • a ticket in a private lottery may be sold or supplied only by or on behalf of the promoters
  • tickets (and the rights they represent) are non-transferable
  • each ticket must state the name of the promoter of the lottery, the person to whom the promoter can sell or supply tickets and the fact that they are non-transferable
  • the price paid for each ticket in a private lottery must be the same, must be shown on the ticket and must be paid to the promoters of the lottery before any person is given a ticket
  • the arrangements for private lotteries must not include a rollover.

    Private society lotteries – This type of lottery can only be promoted by an authorised member of a private society and each person to whom a ticket is sold either is a member of the society or on premises wholly or mainly used for the administration of the society. The society can be any group or society, provided it is not established and conducted for purposes connected to gambling eg a sports club or theatre group could run a lottery for members to raise money for the club. This type of lottery can be organised in two ways - it can be promoted and raise proceeds for the purposes for which the society is conducted or can be promoted wholly for a purpose other than that of private or commercial gain eg raise funds to support a charity or ‘good cause’.

    Work lotteries – The lottery can only be promoted by someone who works on a single set of premises and each person to whom a ticket is sold or supplied also works on the same work premises. This type of lottery can be organised in two ways - by ensuring that no profits are made, all the proceeds must be used for prizes or reasonable expenses incurred in organising the lottery or by promoting it wholly for a purpose other than that of private or commercial gain eg  raise funds to support a charity or ‘good cause’. A sweepstake held in an office is an example of a work lottery.

    Residents' lotteries – A lottery is a residents’ lottery if the promoters live in a single set of premises (the residential premises) and each person to whom a ticket is sold or supplied also lives in the same residential premises. This type of lottery can be organised in two ways - by ensuring that no profits are made, all the proceeds must be used for prizes or reasonable expenses incurred in organising the lottery or by promoting it wholly for a purpose other than that of private or commercial gain eg  raise funds to support a charity or ‘good cause’. The residency requirement can still be satisfied where the premises are not the sole premises in which a person resides e.g. a student’s halls of residence or a residential care home with many buildings.