LAs are advised that we have written to a number of pubs and machine suppliers following an investigation into illegal fund raising through LTVMs.
In these cases, operators (both licensed and unlicensed) were offering to install lottery ticket vending machines in public houses on a ‘profit share’ basis. This tended to involve the absolute minimum of 20% being passed to the society, with the remaining profits (the surplus after the payment of prizes and reasonable expenses) being split between the machine supplier and the premises siting the machine. This is contrary to the Act, which states that it is a criminal offence under sections 260 and/or 261 to use lottery profits for a purpose other than that stated, i.e. the good cause printed on the ticket.
Small society lotteries (registered with their local authority) or large society lotteries (licensed by the Commission) must not be promoted for commercial gain. The funds raised belong to the society and only “reasonable expenses” may be deducted, as dictated by the authorised promoter (the society).
Society lotteries, including those utilising lottery ticket vending machines, must be controlled and promoted by the society (under the terms of their small society lottery registration/Gambling Commission licence) or licensed External Lottery Manager (acting under contract with the society) only.
The pub is acting as a retailer, the machine supplier as a service provider, and the society remains responsible for the lottery. The society must ensure the publican has received the required age verification, self-exclusion, problem gambling and social responsibility training before siting the machines. It is also imperative that there are policies and procedures in place which have been agreed between the society and publican for cash handling and the reconciliation and banking of ticket sales. If these and the other conditions and legislation are not adhered to, it is likely that the lottery is unlawful. A public house selling tickets for an unlawful lottery could be committing criminal offences.
Further information on LTVMs is available on our website.