In essence a lottery is an arrangement which satisfies the statutory description of either a simple lottery or a complex lottery, as per section 14 of the Gambling Act 2005 (“the Act”).
An arrangement is a simple lottery if:
An arrangement is a complex lottery if:
Arrangements that fulfil all of the criteria of either of the above categories are defined as a lottery under the Act.
Section 19 of the Act defines a society as such if it is established and conducted:
It is inherent in this definition that the society must have been established for one of the permitted purposes, 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 – it must have some other purpose.
The Act defines a small society lottery with the definition breaking down into two distinct areas:
The promoting society of a small society lottery must, throughout the period during which the lottery is promoted, be registered with a licensing authority. The licensing authority with which a small society lottery is required to register must be in the area where their principal office is located. If a licensing authority believes that a society’s principal office is situated in another area, it should inform the society and the other authority as soon as possible.
The limits are as follows:
The Act introduces some relaxation of society lottery law and in particular:
As the purpose of permitted lotteries is to raise money for non-commercial 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 acquiesce with these limits then it will be in breach of the Act’s provisions, and consequently be liable for prosecution (see & above for details of limits).
Paragraph 39 of Schedule 11 in the Act sets out the information that the promoting society of a small society lottery must send as returns to the licensing authority with which it is registered, following each lottery held. This information will allow us to assess, in particular, whether financial limits are being adhered to and to ensure that any money raised is being applied for the proper purpose. The information that must be submitted is as follows:
Paragraph 39 of the Act also requires that returns must:
We will refuse an application for any of the following reasons:
However, we may only refuse an application for registration after the society has had the opportunity to make representations against the refusal. These can be taken at a formal hearing or taken via correspondence. We will inform the society of the reasons why we are minded to refuse registration and will provide it with at least an outline of the evidence on which we have reached that preliminary conclusion — in order to enable it to make any representations it sees fit.
The applicant or society may decide to make an appeal against the decision. They must lodge an appeal within 21 days of receipt of the notice of the decision, and this must be made directly to the local magistrates’ court.
Lotteries may involve the issuing of physical or virtual tickets to participants (a virtual ticket being non-physical, for example in the form of an email or text message). Schedule 11(36) requires that a purchaser of a small society lottery ticket must receive a document which identifies:
However, the requirement to provide this information can be satisfied by providing an opportunity for the participant to retain the message electronically or print it.
The Act requires that lottery tickets may only be sold by persons that are aged 16 or over to persons that are aged 16 or over.
Tickets should not be sold in a street, (street including any bridge, road, lane, footway, subway, square, court or passage – including passages through enclosed premises such as shopping malls); however, tickets may be sold from a kiosk, in a shop or door-to-door.
Prizes awarded in small society lotteries can be either cash or non-monetary. However the amount of 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 incurred with the running of the lottery, such as manager’s fees, they must not comprise more than 80% of the total proceeds of the lottery. Donated prizes would not be counted as part of this 80% (as no money would be withdrawn from the proceeds to cover their purchase) but should still be declared on the return following the lottery draw (see 6. above).
|Section of the Act
|Promoting a non-exempt lottery without a licence
|Facilitating a non-exempt lottery without a licence
|Misusing the profits of a lottery
|Misusing the profits of an exempt lottery
|Purporting to operate a small society lottery when not registered, or failing to make the required, or making false or misleading, returns in respect of such lotteries.
|Without reasonable excuse, obstructing or failing to co-operate with an authorised person exercising his/her powers
|Without reasonable excuse, giving false or misleading information to the Commission or a licensing authority.
An incidental non-commerciaI lottery is one that is not promoted for private gain and which is incidental to a non-commercial event. Examples may include a lottery held at a school fete, or at a social event such as a dinner dance. An event is deemed non-commercial if all the money raised at the event, including entrance fees, goes entirely to purposes that are not for private gain. Therefore a fundraising social event with an entrance fee would be non-commercial if the profits went to a society but would be commercial if the profits were retained by the organiser.
For this type of lottery, part one of schedule 11 of the Act, and regulations laid by the regulations, specify the following:
An annual fee must be paid within the period of two months which ends immediately before each anniversary of the registration.