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Lotteries and the Gambling Act 2005

Guidance on lotteries and the Gambling Act 2005 for local authorities

Administration and returns

The Act requires that a minimum proportion of the money raised by the lottery is channelled to the goals of the society that promoted the lottery. If a small society lottery does not comply with these limits, it will be in breach of the Act’s provisions, and consequently be liable to prosecution.

Lottery limits

The limits are as follows:

  • at least 20% of the lottery proceeds must be applied to the purposes of the society (Schedule 11, paragraph 33);
  • no single prize may be worth more than £25,000 (Schedule 11, paragraph 34);
  • rollovers between lotteries are only permitted where every lottery affected is also a small society lottery promoted by the same society, and the maximum single prize is £25,000 (Schedule 11, paragraph 35);
  • every ticket in the lottery must cost the same and the society must take payment for the ticket fee before entry into the draw is allowed (Schedule 11, paragraph 37).

Paragraph 39 of Schedule 11 GA05 sets out the information the promoting society must send as returns to the Licensing Authority with which it is registered. This information must be sent within three months of the conclusion of each draw. This information allows Licensing Authorities to assess whether financial limits are being adhered to and to ensure that any money raised is applied for the proper purpose. The following information must be submitted:

  • the arrangements for the lottery - specifically the date on which tickets were available for sale or supply, the dates of any draw and the value of prizes, including any donated prizes and any rollover;
  • the total proceeds of the lottery;
  • the amounts deducted by the promoters of the lottery in providing prizes, including prizes in accordance with any rollovers;
  • the amounts deducted by the promoters of the lottery in respect of costs incurred in organising the lottery;
  • the amount applied to the purpose for which the promoting society is conducted (this must be at least 20% of the proceeds);
  • whether any expenses incurred in connection with the lottery were not paid for by deduction from the proceeds, and, if so, the amount of expenses and the sources from which they were paid.

Paragraph 39 of Schedule 11 in the Act also requires that returns must:

  • be sent to the Licensing Authority no later than three months after the date of the lottery draw, or in the case of ‘instant lotteries’ (scratchcards) within three months of the last date on which tickets were on sale;
  • be signed (electronic signatures are acceptable if the return is sent electronically) by two members of the society, who must be aged 18 or older, are appointed for the purpose in writing by the society or, if it has one, its governing body, and be accompanied by a copy of their letter or letters of appointment.

The Gambling Commission may inspect a society’s returns, although we will not routinely do so. The Licensing Authority is required to retain returns for a minimum period of 18 months.

You must notify the Commission if returns reveal that a society’s lotteries have exceeded the values permissible, and such notifications will be copied to the society in question. The Gambling Commission will contact the society to determine if they are going to apply for a lottery operator’s licence, thereby enabling them to run large society lotteries lawfully, and will inform the Licensing Authority of the outcome of its exchanges with the society.

If a small society lottery fails to submit returns as specified in section 39 of Schedule 11 to the Gambling Act 2005, they commit a criminal offence under section 262 of the Act.

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Lotteries and the GA05: Lottery Prizes
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Lotteries and the GA05: Lottery register
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