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:
small society lottery
incidental
non-commercial lottery
private society
lottery
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.
Fundraising
You can use certain types of lotteries to
raise funds for good causes, for example societies, clubs and
schools as well as registered charities. Read our introductory
leaflet on
Running a lottery - November 2009, which sets
out the available options or follow the links below for detailed
information:
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 - November 2009
contains in-depth guidance on the rules for small society
lotteries.
Incidental
non-commercial lottery
These are held at non-commercial events,
such as school fetes etc. At such events where any money raised is
not for private gain, you can run an incidental non-commercial
lottery without a licence. All tickets must be sold at the location
and the draw must take place during the event, which may last more
than a single day. The promoters of the lottery may not deduct more
than £100 from the proceeds in respect of the expenses incurred in
organising the lottery, such as the cost of printing tickets, hire
of equipment and so on. No more than £500 can be spent on prizes
(but other prizes may be donated to the lottery) and the lottery
cannot involve a rollover of prizes from one lottery to
another.
Organising
small lotteries - November 2009 contains in-depth
guidance on the rules for incidental non-commercial lotteries.
Private society lottery
Any group or society, except those set up for gambling, and
where the proceeds of the lottery go to the purposes of the
society. If you run or are a member of a private society, as
long as that society has not been formed for gambling, you can run
a lottery or raffle for the benefit of that society without an
operating licence from the Gambling Commission. Tickets can only be
sold to members of the private society or guests on the
society's premises.
Organising small lotteries - November
2009 contains in-depth guidance on
the rules for private society lotteries.
Work, residents' and customer lotteries
Work lottery
These can only be run and played by colleagues at a
particular place of work, but this type of lottery cannot make a
profit so is unsuitable for fundraising. You can run a lottery for
your employees at a single set of work premises without an
operating licence from the Gambling Commission, unless your
workplace is subject to a gambling premises licence. All of the
proceeds from ticket sales must be spent on prizes and
expenses.
Organising small lotteries - November
2009 contains in-depth guidance on
the rules for work lotteries.
Residents’ lottery
These can only be run and played by people living at a
particular address, but this type of lottery cannot make a profit
so is unsuitable for fundraising. You can run a lottery for the
residents living in a single set of premises without a Gambling
Commission licence. All of the proceeds must be spent on prizes or
expenses.
Organising small lotteries - November
2009 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.
If you run a business and would like to run a lottery by
selling tickets to customers on your business premises you can do
so without an operating licence from the Gambling Commission,
unless your business is subject to a gambling premises licence. The
position is different in Scotland where customer lotteries can be
promoted on licensed gambling premises, without an operating
licence from the Gambling Commission. All of the proceeds (ticket
sales) must be spent on prizes and expenses, there can be no
profit.
Organising small lotteries - November
2009 contains in-depth guidance on
the rules for customer lotteries.
Lottery ticket machines
You can sell tickets for a licensed or
registered society lottery or private society lottery by means of a
‘paper’ lottery ticket vending machine. This type of machine
dispenses a scratchcard or pull-tab ticket, and there is no element
of skill or game play required from the purchaser. The
machine does not determine the outcome of the lottery.
Organising
small lotteries - November 2009 and
Promoting society and local authority lotteries - November 2009 contain details on
where and to whom you can sell tickets for each kind of
lottery.
You do not need an additional licence to
operate or supply these machines.
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.
The examples below illustrate the
difference between organising a lottery syndicate and promoting a
lottery.
Example 1 - 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 promoter 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.
Example 2 - Lottery
promoter
If a person or organisation offers to
purchase lottery tickets in the names/addresses of a number of
individuals, as far as the lottery promoter and operator are
concerned, it is those individuals that have entered the lottery.
They would have a direct claim on any prize(s) won and the person
or organisation purchasing the tickets on their behalf would
not.
In this scenario, the person or
organisation purchasing the ticket is a lottery promoter and would
need to hold a licence. The lottery itself would also need to hold
a licence.
More information about the promotion of lotteries can be found in
Promoting society and local authority lotteries - November 2009.
Page last reviewed: February
2013