Running a lottery could be one way to raise funds for your campaign. This guide explains the main rules covering lotteries in the UK. For other ideas on raising money see the Action Network guide, A2128033.
1. What is a lottery?
There isn't a clear legal definition of what a lottery is. The simplest way to understand it is that a lottery is any game of chance. If any skill is involved in winning then it becomes gambling rather than a lottery. You cannot raise funds for your group by organising gambling, so be careful that your event counts as a lottery.
If you have any doubt about whether your game qualifies as a lottery or not consider this: does everyone playing have an equal chance of winning? The only way for a player to improve their chance of winning a lottery should be to buy more tickets.
The regulator responsible for lotteries is the Gambling Commission, which also monitors and licenses casinos, bingo clubs and gaming machines. They have a register of groups who are running lotteries in the UK and are responsible for enforcing the law and investigating complaints.
A small lottery is one which is exempt from the Lotteries and Amusements Act 1996 and there are two main requirements:
The sale of tickets and announcement of results must take place during an event such as a fete, bazaar or dinner dance.
You must not spend more than £250 on prizes and cash prizes are not allowed.
If you stick to these two rules then you will not need to worry about the Gambling Commission as you will not fall under their regulation.
The £250 limit on the value of prizes applies only to those for which you have paid, there is no value limit on prizes which have been donated. In general you do not need a liquor licence to include alcohol among the prizes but you should check with your local authority.
A society lottery is one which is held by a club, group or organisation and from which the proceeds go towards good causes, ie. they are not used not for private or commercial gain. If you decide to run a society lottery you may need to register with the Gambling Commission or your local council. You only need to register if:
The total value of the tickets for the lottery will exceed £20,000
You run more than one lottery in a year with tickets exceeding £250,000 in total
However you must abide by the rules covering prizes, expenses and tickets even if you are not required to register.
Tickets There are rules that cover both what you need to print on the tickets and what restrictions there are on the sale of tickets.
All tickets must be the same price
The maximum price of a ticket is £2
You cannot have offers such as ‘buy two get one free’
You cannot give refunds
The ticket must show the date of the draw
The ticket must show the name and address of your society
If you are a registered charity, the ticket must state this
If you have registered with the Gaming Board, the ticket must state this
You cannot sell tickets to anyone under 16
You cannot sell tickets in the street (including bridges, alleys, subways, etc)
Prizes The basic rules are that the biggest prize should be worth less than £25,000 (or 10% of the tickets sold if the total value of those tickets is over £250,000). This rule also applies to donated prizes.
The value of all the prizes added together must be less than 55% of the tickets sold. Prizes which have been donated do not need to be calculated in this figure.
Remember when calculating the value of prizes - the value of tickets sold is not the same as the value of tickets printed. If you have printed £1,000 of tickets and your prizes are worth £550 then you need to sell all your tickets.
Expenses Your expenses for the lottery cannot exceed 35% of the tickets sold (for lotteries under £20,000). Again, as with calculating the value of prizes, the value of tickets sold is not the same as the value of tickets printed. If you have printed £1,000 of tickets but only sold £500 of them then your expenses will be limited to £175 – not £350.
You should keep a record of all your expenses and where the money to meet them comes from. Keep your lottery money separate from your other funds. You can't use money from the lottery for other expenses.
Even if you do not have to register with the Gambling Commission you need to keep records of your ticket sales and expenses as lotteries run by unregistered groups can still be investigated.
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