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Fundraising, raffles and lotteries

This guide will give you information about the different types of raffles and lotteries you can run and informs you of the rules you should follow.

Published: 23 September 2020

Last updated: 21 November 2023

This version was printed or saved on: 22 May 2024

Online version: https://www.gamblingcommission.gov.uk/public-and-players/guide/fundraising-prize-draws-raffles-and-lotteries

Overview: Fundraising, raffles, and lotteries are all forms of gambling and you must follow the rules for the type of lottery you plan to run, otherwise you may be breaking the law.

You can run a lottery or raffle to raise money for charity. Before you start, check if your fundraising activities would be classed as a lottery.

You must have a registration or licence to run a lottery online or by telephone

Online lotteries include:

Online lotteries and fundraisers are increasing in popularity and many people want to use them to raise money.

Before starting an online lottery, be aware that you will need a Gambling Commission licence in order to run it legally. You may want to consider other types of fundraising if you don’t want to apply for a Gambling Commission licence.

Find out more about legal requirements for lotteries on social media.

Before you organise your fundraiser

Before you begin organising your fundraiser, read our guides which will help you to run a safe and legal lottery.

Find out more about:

Fundraising and lotteries on social media

Be aware that lotteries also include:

These are all forms of gambling and are subject to laws on how they are run.

You may have seen lotteries being promoted on social media, but this does not mean that are being legally ran.

You need a registration or licence to run a lottery online

This includes lotteries on social media, auction or selling sites, fundraising platforms and live streaming platforms.

If you are considering running a lottery online, make sure it is lawful. You can apply for a licence from the Gambling Commission. If your lottery ticket sales are less than £20,000 (£250,000 in a calendar year) you can apply to your local authority for registration.

The only lotteries that can be advertised online are those run under a licence or registration with a local authority, or a lottery being run at a physical event with the tickets being sold at that event.

Under the Gambling Act 2005 (opens in a new tab) it is a criminal offence to run an illegal lottery and you could face prosecution.

If convicted you could be fined or imprisoned. You could also be breaking the terms and conditions of the site which could lead to your profile being removed.

Fundraising and lotteries at events

Events can be a fun way to raise money for charity and good causes and lotteries, tombolas and raffles can be held at events such as:

Lotteries at events are known as incidental lotteries.

You don’t need a licence to run this kind of lottery, but you must make sure you follow the rules.

Before setting up a fundraiser or lottery at an event, look at our guidance on how to run a fundraiser with lotteries or raffles at events.

Fundraising with race nights

A non-commercial race night is an event where participants stake money on the outcome of live, recorded or virtual races.

You can run a race night for charity without a licence from us. However, you must make sure you follow the rules for the type of activity you want to run.

None of the following exemptions for these forms of gambling can be carried out remotely, for example over the internet or social media.

There are three types of race night:

  1. non-commercial gaming
  2. occasional use notices at a sporting venue
  3. private gaming

Only the non-commercial gaming and occasional use notices types can be used for fundraising. 

Non-commercial gaming

Players must select a horse totally dependent on chance. You can’t give odds or form to help players choose. For example, you could play a video of a horse race that’s already taken place as long as you didn’t reveal details of the horses.

This kind of race night can be run without a licence, or any other form of permission, however, it must be run according to the rules of the three categories previously listed.

Money raised from the event

No private gain can be made from non-commercial gaming.  All money taken from the event must be given to the advertised good causes.  However, you can use some of the money to cover any reasonable costs, such as prizes and ticket printing.

Selling drinks, refreshments or other services

If there are third parties selling goods or services at your event this doesn’t count as money raised for charity and can be kept by the third party.

Who can take part

Under-18s can take part bingo, casino, poker or race nights if they are run as non-commercial gaming.

Non-commercial prize gaming 

To run this kind of race night, players must be told before playing what good cause will benefit from the profits of the race.

In non-commercial prize gaming, the ‘race’ determines the individual winner or winners.

For example, those who have paid are given or select a named horse in the race. The winners are then awarded the prizes that had been advertised in advance. 

Prizes

Prizes must not depend on the number of people playing or the total value of tickets sold. There is no limit on prizes as long as they are advertised before the event. 

Non-commercial equal chance gaming 

Equal chance gaming is where the chances are equally favourable to all players, and they’re not competing against a bank. It includes games such as poker or bingo.

An example of a race night as non-commercial equal chance gaming is where each participant pays a fee for a randomly selected ‘horse’ in each ‘race’ and the participant with the winning horse or the person who selected the winning horse receives a prize proportionate to the stakes placed, up to the limits. 

For example, in this kind of race night each player pays a fee for a randomly selected ‘horse’ in each ‘race’. The player with the winning horse can receive a prize proportionate to the stakes placed, up to the limits.

Prizes

The maximum amount that a player may be charged is £8 per day.

This includes:

You must make sure that the amount paid out in prizes is below £600 in total across all players, unless the event is the final in a series in which all of the players have previously taken part. In this case, a higher prize fund of up to £900 is allowed. 

Incidental lottery

You can run a race night as an incidental lottery. This means the activity takes place at, but isn’t the main feature of, another event.

For example, a ‘race night’ run as an incidental lottery is where a horse is picked at random for each paying customer who is then awarded a prize if the horse wins the race.

Occasional use notices

Run a race night at a racetrack for charity

For this kind of race night bets are taken by a licensed bookmaker.

This includes cases where odds and form are available to players. The person administering the betting must have a Gambling Commission licence. You can search our Public Register to check if a gambling business, such as a bookmaker, is licensed.

Where it can take place

This kind of fundraising event can only take place at sports venues under an occasional use notice (OUN). The OUN allows the licensed bookmaker to provide betting facilities at the sports venue for a short period of time.

Before the race night

The premises owner must notify your local licensing authority, usually your local council. They must do this by serving an occasional use notice (OUN). You can find your local council on GOV.UK (opens in new tab)

Serving an occasional use notice (OUN)

An occasional use notice must:

An OUN can’t be used for more than eight days in a calendar year for any one venue.

Using proceeds for fundraising

Because the betting is being used for fundraising, it doesn't matter if the bets taken is held at that venue. The sporting event where the bets are taken also doesn't need to be taking place at the same time as the betting under the OUN.

However, all proceeds must go to a charity or good causes. This includes the difference between stakes placed and pay-out made. Proceeds can’t be taken for private gain by the licensed gambling business.

There is more information about betting under an OUN in section 39 of the Gambling Act 2005 (opens in new tab)

Private gaming

Private gaming can only take place somewhere the public doesn’t have access to.

For example:

You don’t need a licence for this kind of race night. However, you can’t use private gaming for fundraising.

You can’t charge any entry fees

This includes any kind of admission fee or fee for taking part. You also can’t deduct money from stakes or prizes.

You can’t deduct from or levy on money staked or won by players in the game. It doesn’t matter if the charge is said to be voluntary or compulsory. Particularly if players are prevented from taking part if they don’t make the ‘voluntary’ donation, or, if there’s peer pressure to make the donation.

You can’t make a profit from the game

You can’t make any profits, even if you intend to donate the profits to charity or good causes.

Private clubs

Anyone who joins a club to take part in a private event are likely to be legally classed as members of the public. Particularly if someone joins the club a short time before the event in order to take part. Courts won't readily allow membership status to be abused in order to circumvent the law in this way.

Fundraising with 100, 200 and 500 clubs

A 100, 200, or 500 club is a group of people who raise funds for a good cause (non-commercial). This is usually done by running a lottery. 

In most cases, members of the club buy numbered tickets which go into a regular draw:

When the draw is made a percentage of the profit is given as a prize and the remainder goes to a good cause.

How do they operate?

These lotteries are small in scale and they are usually run by a non-commercial society under the permissions of a small society registration with their local authority. 

They may be run by a private members club as a private society lottery. If this is the case, then the club cannot exist for gambling purposes, and only members of the club or people on their premises can take part.  

Tickets cannot be sold outside the premises to the general public, family or friends, and no advertisements for the lottery can be sent off the premises, including text messages, social media or email.

Do I need a licence?

You don't need a licence from the Gambling Commission to run a 100 Club as a small society lottery but you do need a registration with the local authority for where the main administration of the lottery takes place. You do not need any specific permission to run a private society lottery. 

Free draws and prize competitions

The Gambling Commission does not approve free draws or prize competitions and we do not help you to develop them, although we may raise any concerns with you.

Free draws and prize competitions can be run for commercial or private gain and can be used when promoting a product or raffling a high value item such as a car.

Before organising your free draw or prize competition, make yourself aware of the rules so that your free draw or prize competition is within the law.

What is a free draw?

There are two types of free draw:

Free is any method of communication charged at the normal rate, and specifically refers to the use of first or second class post.

Normal rate means that there can be no additional payment over what it normally costs to use a particular method of communication. For example, special delivery is not classed as free.

If you run a free draw with a paid entry route, you must make sure that:

What is a prize competition?

A prize competition is where the outcome is determined by the participants skill, judgement or knowledge. 

The organisers of a prize competition must be able to show that the skill, knowledge or judgement required will: 

Multiple choice questions, or questions that allow a second chance if your first answer is wrong, rarely meet this criteria.  

Do I need a licence to run a free draw or prize competition?

You do not need a licence or permission to run a free draw or prize competition as long as they are being ran in a way that meets the requirements of the Gambling Act 2005 (opens in a new tab).

What happens if my free draw or prize competition does not meet the requirements?

All lotteries are regulated under the Gambling Act 2005 and cannot be run for commercial or private gain.

If you do not meet the requirements then you may be running an illegal lottery.

The Gambling Commission prevents illegal gambling and may act when free draws or prize competitions are being ran as illegal lotteries.

If you are unsure about whether your free draw or prize competition is legal then you should seek legal advice.

Raffling a house or car

Many people running raffles on high value items such as houses and cars do so by running free draws or prize competitions. These are not forms of gambling and we do not regulate them.

How do I create a competition to raffle a house or car legally?  

If you’re organising a prize competition or free draw, it’s your responsibility to ensure you are compliant with the law. If in doubt, you should seek legal advice.  

You cannot run a lottery if the money after expenses and prize costs is not going to a good cause. The organiser or promoter of the lottery must also be a non-commercial society.

You could run the competition as a free draw or prize competition. We do not regulate these and we do not provide advice on how they should be organised.

However, these type of schemes can look similar to lotteries. You can read more about the difference between lotteries, free draws and competitions.

How do I check if a house or car competition is safe to enter?

We cannot advise if a competition is safe to enter because these competitions are not regulated by us. You need to check the competition is legal and that you’re happy with the terms and conditions before entering. We advise you to be careful especially if you are paying a fee to enter.  

I think I’ve entered a competition that might not be legal and I’m unhappy with the outcome – what do I do? 

We are regularly contacted by customers who are frustrated by:

The type of competition you’ve entered affects your next steps. The Advertising Standards Agency (ASA) has more information on the following kinds of competition. You can also submit a complaint to the ASA (opens in a new tab)

Contact the Advertising Standards Agency
Type of competition Find out more about your rights
Free draws Read the ASA's information on promotional marketing and prize draws (opens in a new tab).
Lotteries Read the ASA's information on promotional marketing and lotteries (opens in a new tab).
Free entry routes Read the ASA's information on free entry routes (opens in a new tab).
Social media prize draws Read the ASA's information on prize draws in social media (opens in a new tab).

Other support

You can also contact Citizens Advice (opens in a new tab) if you need help with a consumer problem.

Reverse auctions

If you are organising a reverse auction it is your responsibility to ensure you are compliant with the law. If in doubt, you should seek independent legal advice.

Reverse auctions fall into two categories:

  1. Those where the operator only tells players when they are successful or not.
  2. Those where the operator provides more information, usually following the first bid. More information can include:

Running a reverse auction

You can run a reverse auction without a licence as long as it qualifies as a prize competition and not as a lottery.

A prize competition depends on skill, judgment, or knowledge to enter and does not rely completely on chance. If it is just down to chance – then it is a lottery. Gambling Act section 14 (5) (opens in a new tab) explains in detail about the skill test.

Some examples of how you can ensure your reverse auction is a game of skill could include:

These factors may make it possible to apply a strategy to bidding, for example, demonstrating a level of skill or application of knowledge.

Your reverse auction must meet the test for prize competitions, and all the elements of a lottery should be present, these include:

If it does not meet this test then it could be an illegal lottery and we can take action against the organisers of schemes.

Taking part in a reverse auction

Reverse auctions are schemes where in order to win a prize you must make the lowest unique bid. These bids are usually in pence and the item and it's retail value are shown or described.

These auctions can be run:

You are charged for each bid you make. Bids are generally made via text message (at a premium rate) or through registering on the auction website and paying by debit card or pre-purchased credits.

The prize is won by the person who makes the lowest unique bid. As well as the cost of making each bid, the winner is usually required to pay the amount of their winning bid to receive the prize.

Example

It costs 50p per bid, and the winner bid £50 and submitted five bids. This means that they spent £2.50 on bidding and £50 on the item. They will pay £52.50 in total.

Penny auctions

If you are organising a penny auction it is your responsibility to ensure you are compliant with the law. If in doubt, you should seek legal advice.

In a penny auction players pay a fee to place small bids on items they want. Once the auction has ended the last player to have placed a bid wins the item and pays the final bid price.

You can run a penny auction website without a licence from the Gambling Commission as we do not consider it gambling under the Gambling Act 2005 (opens in a new tab).

As penny auction sites continue to evolve, we will continue to check the way that they operate to ensure those providing facilities to gamble are properly licensed.

Spot the ball

Spot the ball may involve:

This depends on how your scheme is run.

Is your spot the ball scheme betting?

If you organise your spot the ball scheme so that players are expected to guess or judge whether something is true or not, it is likely to be betting.

Example

If the aim is to choose which number of pre-selected positions is the actual position of the ball in the photograph, it is likely to be betting.

You will need an appropriate betting operating licence to run this type of scheme.

Is your spot the ball scheme a game of chance?

Your scheme could be a game of chance.

If participants are required to take part or be successful in more than three processes before winning a prize you will require a remote casino operating licence.

Is your spot the ball scheme a prize competition?

Your spot the ball scheme could be a prize competition.

To be a prize competition, there must be an element of skill, knowledge or judgement that is likely to prevent a high proportion of people from taking part, or prevent a high proportion of people winning a prize.

Example

If a panel of judges decide the position of the ball and players have to apply judgement, skill or knowledge to match their own decision of where the ball is with that of the panel, it is more likely to be a prize competition than a lottery.

Genuine prize competitions are free from statutory control under the Gambling Act 2005 (opens in a new tab). and therefore do not require a licence.

Is your spot the ball scheme a lottery?

Lotteries can only be run for good causes and cannot be run for commercial or private gain.

Your spot the ball scheme could be a lottery if it does not require a sufficient amount of skill and is down to luck.

If you are running a spot the ball scheme that is open to the public as a lottery you will need either a lottery operating licence or to register with your local licensing authority.

If you are organising a spot the ball scheme it is your responsibility to ensure you are compliant with the law. If in doubt, you should seek legal advice.

Private gambling and gaming

Private gaming may only occur in a place to which the public does not have access (a private dwelling, hostel, hall of residence or similar establishment).

No profits can be made from private gaming, irrespective of how you intend to use those profits so it is no good for fundraising.

The gaming must not involve playing or staking against a bank, and all participants in the gaming must have an equal chance of winning.

No charge may be made for participation in private gaming (that includes any entrance fee or other charge for admission).

You can’t deduct any amount from the stakes or prizes either – that would also be considered a charge for taking part in the gaming. It doesn’t matter whether the charge is voluntary or compulsory, particularly if customers are prevented from playing if they do not make a ‘voluntary’ donation, or there is strong peer pressure to make a donation.

If people join a club to attend and take part in your ‘private’ event it is likely they will still be regarded as members of the public, particularly if club membership is acquired only a short time before the event, and in order to attend the event.

Persons under 18 are allowed to participate in private gaming.