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Keeping gambling Fair and safe for all

Circumstances in which you do not need a lottery operating licence

Lotteries cannot be run for private or commercial gain.

There are some circumstances in which you do not need a lottery operating licence:

Prize competitions and free draws

You do not need a licence to operate prize competitions and free draws. More information is available in our detailed advice Prize competitions and free draws: the requirements of the Gambling Act 2005 - December 2009. You should seek independent legal advice to confirm that your competition is lawful.

Small society lottery

The society in question must be set up for non-commercial purposes; e.g. enabling participation in or supporting sports, or cultural activity or charitable. Proceeds must not exceed £20,000 for a single draw and aggregate proceeds from lotteries must not exceed £250,000 in any one year. If you belong to a society or club that wants to run regular lottery draws or raffles, you can register with your local licensing authority to run a small society lottery. A fee will apply.

Promoting society and local authority lotteries contains in-depth guidance on the rules for small society lotteries.

Incidental lottery

These can be held at commercial events (such as exhibitions) or non-commercial events (such as school fetes) and must be promoted wholly for non-commercial purposes, ie the lottery can only be promoted for charitable or other good cause purposes - and cannot be run for private or commercial gain.

All lottery tickets must be sold at the location and during the event and the results of the lottery 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.

The event may last more than a single day. Promoters of the lottery may not deduct from the proceeds of the lottery more than £100 for expenses and not more than £500 on prizes (but other prizes may be donated). This lottery cannot involve a rollover of prizes from one lottery to another.

Organising small lotteries contains in-depth guidance on the rules for incidental lotteries.

Private society lottery

This type of lottery can only be promoted by an authorised member of a society.  The society can be any group or society, provided it is not established and conducted for purposes connected to gambling; for example private members clubs can organise such lotteries.  

Tickets can only be sold to other members of that society and to people on the premises used for the administration of the society. This type of lottery can either:

  • be promoted and raise proceeds for the purposes for which the society is conducted
  • or be promoted wholly for purposes that are not for private or commercial gain (such as to raise funds to support a charity or good cause). 

This lottery cannot involve a rollover of prizes from one lottery to another. 

A mandatory condition attached to gambling premises licences* specifies that premises licensed for gambling in England, Wales and Scotland may not be used for the sale of tickets in a private society lottery. It also specifies that National Lottery products may not be sold on such premises. 

Organising small lotteries contains in-depth guidance on the rules for private society lotteries.

Work lottery

These can only be run and played by colleagues who work at the same single set of premises.

This type of lottery must be organised in such a way as to either:

  • ensure that no profits are made (ie all the proceeds are used for reasonable expenses and prizes)
  • or be promoted wholly for purposes that are not for private or commercial gain (such as to raise funds to support a charity or good cause).

This lottery cannot involve a rollover of prizes from one lottery to another. 

A mandatory condition attached to gambling premises licences* specifies that premises licensed for gambling in England, Wales and Scotland may not be used for the sale of tickets in a work lottery. For example, a casino operator holding a premises licence will not be permitted to hold a work lottery for its staff on those premises. It also specifies that National Lottery products may not be sold on such premises. 

Organising small lotteries contains in-depth guidance on the rules for work lotteries.

Residents’ lottery

These can only be run and played by people who live on the same single set of premises.

This type of lottery must be organised in such a way as to either:

  • ensure that no profits are made (ie all the proceeds are used for reasonable expenses and prizes)
  • or be promoted wholly for purposes that are not for private or commercial gain (such as to raise funds to support a charity or good cause).

This lottery cannot involve a rollover of prizes from one lottery to another.

Organising small lotteries contains in-depth guidance on the rules for residents' lotteries.

Customer lottery

These can only be run by a business, at its own premises and for its own customers.

No prize can be more than £50 in value.

This type of lottery cannot make a profit, and so is unsuitable for fundraising.

All of the proceeds (ticket sales) must be spent on prizes and reasonable expenses.

No rollover of prizes from one lottery to another are permitted.

A mandatory condition attached to gambling premises licences* specifies that premises licensed for gambling in England and Wales may not be used for the sale of tickets in a customer lottery. The position is different in Scotland where customer lotteries can be promoted on licensed gambling premises.

Organising small lotteries contains in-depth guidance on the rules for customer lotteries.

Lottery ticket vending machines

Tickets in a small society lottery (registered with a local authority) or large society lottery (licensed by the Gambling Commission) or in a private society lottery can be sold by means of a lottery ticket vending machine.

This type of machine usually dispenses a scratchcard or pull-tab lottery ticket. There must be no element of skill or game play required by the purchaser and the machine must not determine the outcome of the lottery or display the result within an interval of less than one hour if it is to avoid being classed as a gaming machine and subject to the requirements for gaming machines.

Comparing lottery ticket dispensers and category B3A gaming machines contains in-depth guidance on the differences between lottery ticket vending machines and gaming machines.

You do not usually need a licence to manufacture or supply a genuine lottery ticket vending machine to someone lawfully promoting a lottery. The suppliers of such machines must be careful to ensure that the services they offer do not constitute promoting a lottery unless they have the necessary permission. 

Organising small lotteries and Promoting society and local authority lotteries contain details on where and to whom you can sell tickets for each kind of lottery and what permissions may be required. 

Lottery syndicates

You do not need a licence if you, as the organiser of a lottery syndicate purchase tickets from a lottery and distribute the winnings amongst the syndicate members. However, to run a syndicate, you must ensure that it is operating in a certain way in order to avoid being classed as promoting a lottery under section 252 of the Gambling Act 2005.

Syndicate organiser

In a traditional workplace/family syndicate, person A offers to purchase lottery tickets, using the money of persons B, C, and D.

As far as the lottery operator is concerned, person A is the only ticket holder. Therefore, the lottery operator would only distribute any prize won to person A. Persons B, C, and D would not have a direct claim.

The fact that person A has agreed to distribute the prize, if any of the tickets win, amongst persons B, C, D, gives a contractual relationship between the parties.

This personal syndicate organizer (person A) would avoid being classed as a lottery promoter.

If a business operated syndicates as described, the same would apply.

More information about the promotion of lotteries can be found in Promoting society and local authority lotteries.

 

 

 

 

Page last reviewed: April 2016

 

*Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409) and  Gambling Act 2005 (Mandatory and Default Conditions) (Scotland) Regulations 2007 (SSI 2007/266)