A lottery is a kind of gambling that has three essential elements: 1) payment is required to participate; 2) one or more prizes are awarded and 3) those prizes are awarded by chance.
Where a lottery (e.g. raffle, sweepstake, 100 club) is used to raise money for a good cause, a licence or registration is needed. Small societies need to be registered with the local authority where the principal office of the society is located, and the limits for a small society is described below under Tickets. Large societies which will exceed these limits need to be licensed by the Gambling Commission.
Exempt lotteries do not need a licence from the Gambling Commission or a registration with the local authority. These are:
- incidental non-commercial lotteries – commonly held at charity fund raising events
- private society lotteries – only members of the society and those on society premises can participate in the lottery
- work lotteries – only people who work together on the same premises may participate
- residents’ lotteries – only people who live at the same premises may participate
- customer lotteries – only customers at the business premises may participate
The society must be ‘non-commercial’, meaning it is established and conducted for:
- charitable purposes (as defined by Section 2 of the Charities Act 2011)
- the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity
- any other non-commercial purpose other than that of private gain
The individual applying for the registration must be doing so with authorisation to represent the society and will be registered as the promoter of the society. An application form can be found in the downloads section of this page. The fee for new registrations and renewals can be found within the Gambling Act 2005 fees and applicants of new registrations are advised to apply four weeks in advance.
The lottery (e.g. raffle, sweepstake, 100 club) may involve issuing a ticket. This can be physical or virtual but can only be sold to people aged 16+ and will need to identify:
- the name of the promoting society
- the price of the ticket*
- the promoter or lottery manager’s name and address
- the date of the draw
* all tickets must cost the same and the ticket fee must be paid to the society (i.e. the society must take payment) before entry into the draw is allowed.
For small society lotteries the total value of tickets to be put on sale per single lottery must be £20,000 or less, or the aggregate value of tickets to be put on sale for all lotteries in a calendar year must not exceed £250,000.
At least 20% of the lottery proceeds must be applied to the purposes of the society and no single prize may be worth more than £25,000. 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.
Prizes can be cash or non-monetary. Prizes can be donated or money can be deducted from the amount raised by the lottery. Where money is deducted to use for prizes and organising the lottery, this amount cannot exceed 80% of the total raised by the lottery. For example - if £100 was raised by a lottery, at least £20 has to be used for the society’s purpose, meaning no more than £80 can be used for prizes, printing raffle tickets, postage etc.
A returns form can be found in the downloads section of this page. This tells us how much money was raised by the lottery, if any of the money raised was used for prizes or organising the lottery and more importantly how much is then awarded to the society (this must be at least 20% of the money raised by the lottery).
One returns form should be completed per lottery. The returns form must be signed on the back by two people to certify the amounts are correct and should then be returned to the licensing authority within 1 month of the lottery being drawn.
Licensing registers are available to view using the link below.
West Lindsey District Council
Guildhall, Marshall's Yard