34.2. The Gambling Commission and the National Lottery Commission merged on 1 October 2013. No change has been made to the legislation which governs how commercial gambling, and the National Lottery are regulated. The Commission licenses and regulates all commercial gambling and the National Lottery in Great Britain.

34.3. The Act sets out a definition of a lottery, detailed below, and provides that promoting or facilitating a lottery is illegal, unless it falls into one of two categories of permitted lottery²², namely:

licensed lotteries – these are large society lotteries and lotteries run for the benefit of local authorities that are regulated by the Commission and require operating licences
exempt lotteries – there are four types of exempt lottery that are expressly permitted under Schedule 11 of the Act, including the small society lottery.

Definition of lottery

34.4. A lottery is any arrangement that satisfies all of the criteria contained within the statutory description of either a simple lottery or a complex lottery, under s.14 of the Act.

34.5. An arrangement is a simple lottery if:

persons are required to pay to participate
one or more prizes are allocated to one or more members of a class
the prizes are allocated by a process which relies wholly on chance.

34.6. An arrangement is a complex lottery if:

persons are required to pay to participate
one or more prizes are allocated to one or more members of a class
the prizes are allocated by a series of processes
the first of those processes relies wholly on chance.

Definition of society

34.7. Licensing authorities should define ‘society’ as the society, or any separate branch of such a society, on whose behalf a lottery is to be promoted, and need to understand the purposes for which a society has been established in ensuring that it is a non-commercial organisation. Further information about establishing non-commercial societies can be found in paragraph 34.29. S.19 of the Act defines a society as such if it is established and conducted:

for charitable purposes, as defined in s.2 of the Charities Act 2006 (opens in new tab)
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.

34.8. It is inherent in this definition that the society must have been established for one of the permitted purposes as set out in s.19 of the Act, and that the proceeds of any lottery must be devoted to those purposes. It is not permissible to establish a society whose sole purpose is to facilitate lotteries.

Local authority lotteries

34.9. Local authorities are entitled to operate their own lotteries but may only do so if licensed by the Commission. Local authorities must commit a minimum of 20 percent of the proceeds from such lotteries for a purpose for which they have power to incur expenditure and must also adhere to the other relevant provisions in the Act. They may also need to hold a remote gambling operating licence, in the event that they wish to sell lottery tickets via electronic or other remote technological methods such as over the telephone, email or via the internet.

References

²² For further information regarding this see the advice - Promoting society and local authority lotteries and How to run a lottery or fundraiser (opens in new tab)

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Licensing authority guidance

Last updated: 14 September 2023

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Contents

2 - The status of lotteries under the Act

Definition of lottery

Definition of society

Local authority lotteries

References

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