Lotteries are one of the most prevalent types of gambling in the UK. Any type of competition or prize draw scheme will be classed as a lottery if it has the following characteristics:
- players have to pay in order to take part
- one or more prizes is allocated to one or more players
- prizes are allocated by a process which relies wholly on chance (or if there is more than one round to select a winner, the first round relies wholly on chance).
Because of this wide-ranging definition, a number of types of competition could fall within the definition of lotteries, including raffles, tombolas, sweepstakes, 100/500 clubs, and prize draws. Any such promotions must comply with the requirements of a category of lottery, as set out below. In some cases, this will require the promoter to register with us, or obtain a licence from the Gambling Commission.
Charities, clubs and non-commercial organisations wishing to run small lotteries to raise funds for their activities will need to register with their local council. Small lotteries can be used to raise up to £250,000 per calendar year, with a limit on the proceeds from each individual lottery of £20,000. Please see our small society lotteries page for further details.
Other types of lottery
The Gambling Act 2005 regulates a number of other types of lottery, although Lambeth Council only has responsibility for small society lotteries.
Large society lotteries
Any non-commercial society that organises a single lottery expected to raise more than £20,000, or multiple lotteries raising more than £250,000 in a calendar year, must hold a lottery operating licence issued by the Gambling Commission.
Incidental lotteries are those held entirely at non-commercial events (i.e. all tickets are sold and the draw is made at the event), where all the money raised at the event goes entirely to purposes that are not for private or commercial gain.
Private society, work or residents lotteries are those where tickets are only sold to society members, workers in or residents of a premises. An example might be a weekly raffle where tickets are sold only to the residents of a residential care home.
Customer lotteries are those run by occupiers of business premises selling tickets only to customers on the premises itself.
The National Lottery is the largest lottery scheme in the UK. The operator is licensed and regulated by the National Lottery Commission, who ensure that their competitions are run in accordance with the licence terms and conditions and the relevant legal requirements.
Skill competitions and free prize draws
Most skill competitions will not be classed as lotteries, as they will not rely wholly on a process of chance to select the winner. The test that has to be applied is whether the competition (which may either rely on a test of skill, such as sporting ability, or knowledge) is sufficiently difficult to eliminate a significant proportion of players.
Similarly, free prize draws, which do not require payment of an entry fee, are not considered to be lotteries.