Lotteries are one of the most popular 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. 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 the local authority for the area in which the principal offices of the society are situated.
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.
Register your small lottery
The initial registration fee is £40, with an annual fee of £20 payable in each subsequent year that the registration is in force.
Restrictions on small lotteries
To be classified as a 'small' lottery, each draw must meet the following requirements:
- the proceeds from a single lottery must not exceed £20,000
- the aggregate proceeds from lotteries promoted in a calendar year must not exceed £250,000
- at least 20% of the proceeds of every lottery must be used for a purpose for which the promoting society is established and conducted.
The maximum value of any prize allowed in a small society lottery is £25,000. This limit applies to both cash prizes and the value of any goods or services offered as a prize.
Unclaimed prizes can be 'rolled over' to future lotteries run by the same society, providing that the prize limit is not breached.
Every ticket sold in a lottery must be the same price, and the buyer must be given a document that identifies the promoting society, the price of the ticket, the name and address of a person responsible for the lottery, and the draw date(s).
Lottery tickets may only be sold by persons over the age of 16, to persons over the age of 16.
Filing of records
After promoting a lottery, the registered society must return details of that lottery to the local authority within three months of the date of the draw (or last draw). The details required include:
- details of the arrangements for the lottery including the date(s) on which tickets were sold, the dates of any draw(s) and the arrangements for prizes (including any rollover)
- the proceeds of the lottery
- the amounts deducted in respect of the provision of prizes
- the amounts deducted in respect of other costs incurred in organising the lottery
- any amount applied to a purpose for which the promoting society is conducted
- details of any expenses that were paid for other than by deduction from the proceeds.
You can use the Lottery returns form to return these details.
Every completed return must be signed by two directors, trustees or members who have been nominated by the society. A written document confirming this nomination (e.g. minutes from an AGM) should be supplied with the return.
The council maintains a public register listing all of the societies registered for the promotion of small society lotteries. This register, together with the details of any completed lotteries in the last 18 months, can be viewed at our offices at Blue Star House during office hours.
The Gambling Act 2005 regulates a number of other types of lottery, although the 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 (that is 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.