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Lotteries toolkit

Small society lotteries do not require a licence from us but must be registered with their local authority in the area where the principal office of the society is located.

Society lotteries are lotteries promoted for the benefit of a non-commercial society. A society is non-commercial if it is established and conducted:

  • for charitable purposes
  • for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity
  • for any other non-commercial purpose other than that of private gain.

A small society lottery:

  • does not have proceeds that exceed £20,000 for a single draw
  • does not have aggregated proceeds from lotteries in excess of £250,000 in any one year.

GLA: Part 34 - Small society lotteries

Lotteries that exceed the small society lottery limit

You should inform a society that they must apply for an operating licence from us if, in the course of running a small society lottery:

  • proceeds exceed £20,000 for a single draw
  • aggregated proceeds from lotteries exceed £250,000 in any one year.

You should also inform us in writing and supply a copy of the statement relating to the lottery

  • supply statements relating to any other lottery which make the lottery in question a large lottery.

Small society lotteries: changes to draw dates

If a registered small society lottery needs to change the date of their draw they must contact you to check if you have specific terms and conditions you must adhere to.

If they put back the date of the draw, it will need to take place as soon as practically possible.

They must make every attempt to notify those who have purchased tickets in the lottery/raffle of the change to the draw date. The notification may be through a number of channels including email, a telephone/text message, their website, newsletter and local newspaper.

External lottery managers

Registered societies may employ an external lottery manager (ELM) to run all or part of their lottery. ELMs must be licensed by us.

Local authority lotteries

If you are a local authority you may run a lottery to raise funds to cover anything for which you have the power to incur expenditure, for example, local community projects, arts centres or parks and leisure facilities.

Local authority lotteries must give a minimum of 20% of the gross proceeds of each lottery to a purpose for which it has power to incur expenditure.

Up to a maximum of 80% of the gross proceeds of each lottery may be divided between prizes and the expenses of the lottery. The maximum value of tickets that can be sold in a single lottery is £5 million.

The maximum aggregate value of lottery tickets that can be sold in any calendar year is £50 million (pro-rata limit of £31,311,475 in 2020).

The maximum prize in a single lottery is £25,000 or 10% of the proceeds (gross ticket sales), whichever is greater. Rollovers are permitted provided the maximum single prize limit is not breached.

If your local authority runs a lottery you must appoint a person to have overall management responsibility for the promotion and proper management of the lottery and for compliance with the regulatory regime as a whole. That person should be a senior manager who holds the relevant delegated authority from the local authority.

Depending on whether your lottery would be considered a small scale operator or not, that person will be required to hold either a Personal Management Licence (PML) or complete an Annex A, at the time the operating licence is applied for. Our licensing department will be able to advise you on which is required.

Under the previous lottery legislation (the 1976 Lotteries and Amusements Act (opens in new tab)) a significant number of local authorities held registrations with the Gaming Board of Great Britain to promote lotteries to raise income.

Many local authorities now hold lottery operating licences under the Gambling Act 2005 (opens in new tab), a full list is available on the register of licence holders. If you require further information about any of these lotteries, contact the relevant local authority directly.

External lottery managers

You may employ an external lottery manager (ELM) to run all or part of your lottery. ELMs must be licensed by us. A full list of licensed ELMs is available on the register of licence holders.

Information reporting requirements

You must submit information to us about each lottery you operate. Each lottery submission must detail:

  • lottery draw date (for ‘instant’ scratchcard lotteries this would be the expiry date of the tickets or the last date tickets were available for sale)
  • total proceeds broken down between remote and non-remote sales
  • amount applied directly to purposes for which you have power to incur expenditure
  • amount distributed between expenses and prizes (including any amount deducted for a rollover in a future lottery)
  • amount of prizes paid out in a rollover
  • whether the lottery was run as part of a branded lottery scheme
  • the value of the largest prize awarded
  • the lottery type (raffle, subscription lottery, retail/online scratchcards or vending machine dispensed scratchcards)
  • ticket cost

Information to lottery players: proceeds and prizes

Social responsibility codes attached to all lottery operating licences include a requirement to take account of the Commission’s guidance on providing information to lottery players about how proceeds are used and the likelihood of winning a prize and how those prizes are allocated. This information must be available prior to participating in a lottery.

Further information about these requirements can be found in the Commission’s guidance Information to lottery players: proceeds and prizes.

You must also publish annually the proportion (as a percentage) of lottery proceeds (tickets sales) applied directly to the purposes of the lottery, for which you have the power to incur expenditure.

Lotteries toolkit – case studies

Small society lotteries – multiple registrations

Small society lotteries may attempt to avoid applying for a society lottery operating licence by obtaining two or more registrations with the same or different local authorities.

The Gambling Act 2005 (opens in new tab) states that a society lottery is a large lottery if its proceeds exceed £20,000, or if the aggregate proceeds in a calendar year exceed £250,000.

In cases where a society has separate branches with different aims and objectives, it is acceptable for them to hold more than one licence or registration. However, in cases where a society holds more than one registration and the aims and objectives of those societies are the same, this may constitute a breach of the threshold limits for small society lotteries.

Schedule 11, Part 4 of the Gambling Act 2005 (opens in new tab)

In a case where a society applies for more than one registration, take care to ensure that the applicant societies have separate and different aims and objectives. This is also a good opportunity to ensure the society is a genuine one by asking for a copy of their terms and conditions and their constitution.

If the aims and objectives of the societies are the same and the combined proceeds are likely to exceed the threshold limits, advise the applicant to apply for a society lottery operating licence, instead. Please let us know if this occurs.

You may want to check, when the annual renewal fee is paid, that a society does not hold a duplicate registration with you or another local authority.

Payment to enter a lottery and the status of donations

How to distinguish free draws from lotteries when the payment is described as a donation. The definition of a lottery includes a requirement that participants pay to enter the lottery.

Section 14 of the Gambling Act 2005 (opens in new tab)

This is different to a free draw where no payment to participate is made. Free draws are not regulated as gambling under the Act.

Some payments in free draws, such as standard rate postage, are excluded from the definition of payment to enter a lottery. Paying to enter includes paying money, transferring money’s worth and, in the case of free draws linked to product promotions, paying for goods or services at a price or rate which reflects the opportunity to participate in the draw.

Schedule 2 of the Gambling Act 2005 (opens in new tab)

If you are required to make a donation to enter a prize draw this constitutes payment to enter a lottery if the other two elements of the definition are present: namely prizes and the outcome of the arrangement determined wholly by chance.

If you have the option of making a donation or being entered into the same draw without making a donation that would not be caught as payment to participate in a lottery.

Further advice on the distinction between lotteries and free draws is available in: Prize competitions and free draws - The requirements of the Gambling Act 2005.

Lottery ticket vending machines – ticket requirements

Lottery ticket vending machines are generally used to dispense instant win lottery tickets, usually scratchcards or pull tab tickets.

Specific information must be displayed on private society lottery tickets.

Schedule 11, part 2, paragraphs 15, 17, 18 Gambling Act 2005 (opens in new tab)

Each ticket must be a document and must state:

  • the name and an address of each of the promoters of the lottery
  • the class of persons to whom the promoters are willing to sell or supply tickets
  • that the ticket is not transferable
  • the price of the ticket.

Small society lotteries, registered with their local authority, are also required to display specific information on lottery tickets:

Schedule 11, part 4, paragraph 36 Gambling Act 2005 (opens in new tab)

Each ticket must be a document and must state:

  • the promoting society
  • the price of the ticket
  • name and an address of a member of the society who has responsibility for the promotion of the lottery, or the external lottery manager
  • the date of the draw or information which enables the date of the draw to be determined (for example, every Friday).

Some societies buy or rent vending machines to dispense their lottery tickets. Such machines are often supplied by licensed gaming machine suppliers but the operation and/or design of the machine must not constitute a gaming machine.

Advice on the distinction between lottery ticket vending machines and gaming machines is available in: Comparing lottery ticket dispensers and category B3A gaming machines’ a quick guide for licensing officers.

Those who supply manufacture and/or site lottery ticket vending machines are not required to hold an operating or premises licence or any other permission. Where a lottery ticket vending machine is used it is the responsibility of the promoter of the lottery to ensure that it is operated lawfully.

The rules for customer lotteries

Schedule 11, part 3 Gambling Act 2005 (opens in new tab)

A customer lottery or raffle cannot make a profit so is not suitable for fundraising. All of the money collected through ticket sales must be used to pay for the prizes and any expenses incurred organising the lottery.

  • A customer lottery can only be run by a business for its customers at the time they are on the business premises.
  • Tickets must not be sold to children under 16 years of age.
  • No prize can be more than £50 in value.
  • No rollover of prizes from one lottery to another is permitted.
  • Only one lottery draw is permitted in each period of seven days.

Tickets must show the name and address of the organiser, the ticket price, any restrictions as to who may or may not buy a ticket, and state that the rights created by the ticket are non-transferable.

If the business is subject to a gambling premises licence customer lotteries are prohibited.

The position is different in Scotland where customer lotteries can be promoted on licensed gambling premises, without an operating licence from the Gambling Commission.

Private society lotteries cannot have rollovers

Private society lotteries are not allowed to have a rollover of unallocated prizes

Schedule 11, part 2, paragraph 19 Gambling Act 2005 (opens in new tab)

This category of lotteries includes private society, work and residents lotteries.

Retention periods for small society lottery records

Under the Act small society lottery returns should be retained for 18 months and be made available for inspection by a member of the public.

Schedule 11, paragraph 55 Gambling Act 2005 (opens in new tab)

However we request you retain returns for three years in the event that we may need to inspect them. Our interest, although unlikely, would be a regulatory one, hence the longer time period.

Guidance to licensing authorities, paragraph 34.53

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Last updated: 23 December 2022

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