Lotteries and the Gambling Act 2005
Guidance on lotteries and the Gambling Act 2005 for local authorities
- Definition of a lottery
- Definition of ‘prize’
- Definition of ‘society’
- Application and Duration
- Annual Fee
- Refusal of application
- Revocation of a small society’s registered status
- Lottery Tickets
- Lottery Proceeds
- Lottery Prizes
- Administration and returns
- Lottery register
- Types of lottery that do not require a registration or licence (exempt lotteries)
- When is a lottery not a lottery?
- Common Problems
Types of lottery that do not require a registration or licence (exempt lotteries)
A customer lottery is a lottery held by a business for its customer. This type of lottery cannot make a profit. A customer lottery is only exempt from regulation if the following conditions are met:
- It can only be run by a business for its customers at the time they are on the business premises (i.e. not online and not by distributing tickets from elsewhere);
- 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;
- Customer lotteries cannot be run on premises licensed under a GA05 Premises Licence.
This does not prohibit AGC’s for example from providing free draws to their customers. These are not lotteries because there is no requirement to pay to enter.
An incidental lottery is one that is held at an event, such as a charity dinner, festival, or fete. The event itself can be commercial or non-commercial. No licence or registration is required to hold a lottery at such events provided the following conditions are met:
- The lottery must be incidental to the commercial or non-commercial event;
- The lottery must be promoted wholly for a charitable or other ‘good cause’– not for private or commercial gain;
- The promoters of the lottery may not deduct more than £100 from the proceeds for 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 deducted from the proceeds to pay for prizes. However, other prizes may be donated. There is no maximum limit on the value of donated prizes;
- The lottery cannot involve a rollover of prizes from one lottery to another;
- Tickets can only be sold at the location and during the event. 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.
There are three types of private lottery. These are work lotteries, residents’ lotteries, and private society lotteries.
In each of these cases, tickets may not be sold to the public. They can only be sold to:
- In the case of a work lottery, people who work at or from the same premises as the promoter of the lottery (so this does not allow an organisation to sell tickets to people who work at different offices for the same company);
- In the case of a residents’ lottery, persons who habitually reside in any part of the same premises as the person promoting the lottery (for example sheltered accommodation);
- In the case of a private society, to persons who are members of that society, or persons who are on the premises wholly or mainly used for the administration of the society or the conduct of its affairs. The society may not be established for the purposes of gambling. This section would include societies such as working men’s’ clubs, theatre clubs, and sports clubs providing facilities for young people to train.
Work lotteries and residents’ lotteries can only be promoted to raise funds for a charity or good cause OR in a way that ensures no profit is made (i.e. all the income is devoted to prizes and expenses). Private society lotteries can be promoted to raise funds for charity or a good cause OR for the purposes of the society.
Rollovers are not permitted in any type of private lottery.Previous section
Lotteries and the GA05: Lottery register Next section
Lotteries and the GA05: When is a lottery not a lottery?
Last updated: 11 October 2021
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