Licensing

Small society lotteries are required to register with their local authority and do not require a licence from the Gambling Commission providing they meet the following criteria:

• £20,000 or less worth of tickets are put on sale and the society's aggregate proceeds from the lotteries do not exceed £250,000 a year.  If these amounts are exceeded then they must register with the Gambling Commission.

Small society lotteries who are registered with the local authority and who sell tickets by means of remote communications (internet, telephone etc.) will not be required to hold a remote gambling licence issued by the commission.

Making an application

The society will be required to be registered with their local authority in the area where their principal office is located.  This consists of an application form, a fee of £40 and an authorisation form naming a Promotor and two members certified to countersign any returns made to the local authority, signed by the committee.

The registration does not have an expiry date, however an annual fee of £20 is due within two months prior to the anniversary of the registration. Failure to pay within time will cause the cancellation of the registration.

Application forms and further information are available from the Licensing unit.

External Lottery Managers

Registered societies may use external lottery managers (ELMs) to run part or all of its lottery. An ELM is defined in section 257 of the Gambling Act 2005 as someone that is a person or a company who makes arrangements for a lottery on behalf of a society or local authority but is not a member, officer or employee of the society or authority.

All ELMs must hold a lottery managers operating licence issued by the Gambling Commission before they can manage a licensed society or local authority lottery or a society lottery registered with a local authority.  

The use of an ELM to manage part or all of its lottery does not absolve the society from its responsibility for ensuring that the lottery is conducted in such a way as to ensure that it is lawful and fully complies with all conditions and codes of practice.

Ticket Information

All tickets in a society lottery registered with a local authority must state:

• the name of the society on whose behalf the lottery is promoted;
• the price of the ticket (must be the same for all tickets - there is no maximum limit on ticket prices);
• the name and address of the member of the society responsible for the promotion of the lottery;
• the date of the draw.

Sale of Tickets

Lotteries are a form of gambling and as such societies are required to ensure that children and other vulnerable people are not exploited by their lottery.

The minimum age for participation in a lottery is 16 years of age. A person commits an offence if they invite or allow a child to enter a lottery.

Tickets should not be sold in the street, where street includes any bridge, road, lane, footway, subway, square, court or passage (including passages through enclosed premises such as shopping malls).

Tickets may be sold from a kiosk, in a shop and door to door.

Prizes

Prizes awarded in small society lotteries can be either cash or non-monetary. The amount of the money deducted from the proceeds of the lottery to cover prizes must not exceed the limits set out by the Act i.e. that combined with any expenses (this includes fees for external lottery managers if used) incurred with running the lottery, must not comprise more than 80% of the total proceeds of the lottery. Donated prizes are not counted as part of 80% (as no money would be drawn to cover the purchase) but should still be declared on the return following the draw.

Lottery Returns

Every society registered with the local authority to run small lotteries must submit a statement providing the following information:

• the date on which the tickets were available for sale or supply and the date of the draw;
• the total proceeds of the lottery;
• the amounts deducted by the promoters of the lottery in respect of costs incurred in organising the lottery, the amount applied directly to the purpose for which the promoting society is conducted (at least 20% of the gross proceeds); and
• whether any expenses incurred in connection with the lottery were not paid by deduction from the proceeds and if so the amount of expenses and the sources from which they were paid;
• a registered society's statement must be sent to the local authority within three months beginning on the day on which the draw (or last draw) took place. It must be signed by two members of the society appointed in writing for that purpose by the society's governing body and accompanied by a copy of that appointment.

The purpose of permitted lotters is to raise money for non-commerical causes, 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 for prosecution.

The Gambling Commission may require to inspect a society's returns and as such the licensing authorities are required to retain returns for a minimum period of three years from the date of the lottery draw.

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