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A general guide to the law and requirements for obtaining a society lottery registration.

Zoe Gofton
023 9268 8367

The law on lotteries is complex and not straightforward. This page is intended to provide help and guidance to societies wishing to promote lotteries. It also tells you what other types of lotteries can be conducted without breaking the law.

This guide takes into account changes in the law which came into effect on 1 September 2007 under the Gambling Act 2005 (“the Act”).

We have tried to explain this legislation plainly and clearly. We may not cover every individual aspect of lottery law and you should still consult the Act and associated regulations mentioned and take professional or legal advice if appropriate.

Pages within this section will tell you:

  • What the main legal requirements are.
  • What information we need from societies to enable us to consider your registration.

We will be asking you to complete an application form in order that we can process your application quickly. All information received will be treated with respect and in confidence.

Please read this page carefully. Feel free to ask (or phone) for advice at any time. 

The Act of Parliament controlling lotteries is the Gambling Act 2005.  The Act introduces a new regulator for all gambling (except the National Lottery and spread betting) in Great Britain, the Gambling Commission.  It also introduces a new licensing regime for society and local authority lotteries and a registration system for small society lotteries.

The Act creates two broad classes of lottery:

  • Large society lotteries and lotteries run for the benefit of local authorities which will be licensed by the Gambling Commission; and
  • Exempt lotteries, including small society lotteries which are registered with licensing authorities (local authorities).

The Gambling Commission does not regulate the National Lottery, this continues to be regulated by the National Lottery Commission under separate legislation.


Definition of a lottery

An arrangement is a simple lottery if:

  • Persons are required to pay to participate;
  • One or more prizes are made available; and
  • The prizes are allocated by a process which relies wholly on chance.

An arrangement is a complex lottery if:

  • Persons are required to pay to participate;
  • One or more prizes are made available;
  • The prizes are allocated by a series of processes; and
  • The first of those processes relies wholly on chance.

Note:  By virtue of section 14(5) of the Act, for the purpose of these definitions, a process which requires persons to exercise skill or judgement or display knowledge is to be treated as relying wholly on chance if:

  • There is no reasonable expectation that a significant proportion of persons who participate will be prevented from receiving a prize; and
  • There is no reasonable expectation that a significant proportion of persons who participate will be prevented from doing so.

There are basically three types of lottery that can be promoted under the Act. These are as follows:


Large Society Lotteries

These are lotteries promoted for the benefit of a non-commercial society.  A society is non-commercial if it is established and conducted:

  • For charitable purposes
  • For the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity, or
  • For any other non-commercial purpose other than that of private gain.

A licence is needed from the Gambling Commission.


Local authority lotteries

A local authority may use the net proceeds of its lottery for any purpose for which it has power to incur expenditure.  A licence is needed from the Gambling Commission.


Exempt lotteries

Exempt lotteries do not require a licence from the Gambling Commission, although small society lotteries are required to register with their local authority.  In addition to small society lotteries, exempt lotteries include:


  • 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.

If the total proceeds (ticket sales) for a society lottery exceed £20,000 or if the proceeds of previous lotteries in the same calendar year have already reached or may, taking into account that lottery in question, reach £250,000 in one calendar year then the lottery is a large lottery and may only be run under a lottery operating licence issued by the Gambling Commission.  Further information about obtaining such licences can be found on the Gambling Commission’s website

An incidental non-commercial lottery is:


  • Not promoted for private gain; and
  • Is incidental to a non-commercial event.


Such examples may include a lottery held at a school fete or at a social event such as a dinner dance.  An event may be regarded as non-commercial if all the money raised at the event, including entrance fees, goes entirely to purposes that are not for private gain.  For example 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.


The Act also specifies that:


1.  the promoters of the lottery may not deduct more than £100 from the proceeds in respect of the expenses incurred in organising the lottery, such as the cost of printing tickets, hire of equipment and so on

2.  not more than £500 can be spent on prizes (but other prizes may be donated to the lottery)

3.  the lottery cannot involve a rollover of prizes from one lottery to another

4.  all tickets must be sold at the location during the event, and the result made public while the event takes place.


NOTE: The Licensing Act 2003 permits prizes of alcohol to be offered in lotteries without the need for a premises licence under the 2003 Act.

There are three types of private lotteries that qualify as exempt lotteries which are:


  • Private society lottery – these can only be promoted by authorised members of the society; and tickets can only be sold to other members of that same society, or to persons on the society premises.  The lottery can only be promoted for a purpose for which the society is conducted, and the society can be any group or society, so long as it is not established and conducted for purposes connected to gambling.


  • Work lottery – the promoter of the lottery must work on the premises and tickets can only be sold to other people who work on the same premises.  The lottery must not be run for profit and all the proceeds must be used for prizes or reasonable expenses incurred with organising the lottery.


  • Residents’ lottery – these must not be run for profit and all the proceeds must be used for prizes or reasonable expenses.  The promoter of the lottery must reside on a single set of premises and tickets can only be sold to other residents of the same set of premises.  A person can still satisfy the residency requirement even where the premises are not the sole premises in which a person resides.

The Act requires that no advertisements for the above private lotteries may be displayed or distributed except at the society or work premises or the relevant residence.

Rollovers are prohibited in private lotteries.

Whilst exempt from registration, private lotteries must comply with conditions set out in schedule 11 of the Act which relate to the price and format of tickets.  In brief, the requirements are:


  • A ticket in a private society lottery may only be sold or supplied by the promoter or another person who is a member of the same society, in a works lottery by the promoter or another person employed on the same premises, or in the case of a residents’ lottery, by the promoter or another person who resides on the same premises,
  • Rights conferred by tickets are not transferable and this must be made clear on the lottery tickets.
  • Each ticket must state the name and address of the promoter(s) of the lottery and the class of persons to whom the promoter(s) can sell or supply tickets.
  • The price paid for each ticket in a private lottery must be the same, must be shown on the ticket and must be paid to the promoters of the lottery before any person is given a ticket,

Private lotteries may not be conducted on vessels.  The definition of a vessel (section 353(1) of the Act) is:

  • Anything (other than a seaplane or amphibious vehicle), designed or adapted for navigation or other use in, on or over water;
  • A hovercraft; or
  • Anything, or any part of any place, situated on or in water.


Customer lotteries

A customer lottery is a lottery run by the occupiers of business premises, who sell tickets only to customers present on their premises.

The Act sets out the following stipulations:

  • Tickets for the lottery can only be sold to a person on the business premises as a customer of the promoter.
  • The lottery must be arranged to ensure that no profit is made; therefore the proceeds can only be used for reasonable expenses and the provision of prizes.
  • A ticket in a customer lottery may only be sold or supplied by the promoter or by someone on their behalf.

No advertisement may be:

  • Displayed or distributed except on the business premises;
  • Sent to any other premises;
  • The lottery therefore can only be advertised on the premises on which it is held.
  • No ticket may result in the winner receiving a prize worth more than £50.
  • No rollovers of prizes are permitted.

Each ticket must state:

  • The name and address of the promoter of the lottery.
  •  The class of persons to whom the promoter can sell or supply tickets.
  •  That the rights conferred by the sale or supply of a ticket in a customer lottery are not transferable.
  • Customer lotteries may not take place within seven days of another customer lottery promoted on the same business premises.

Customer lotteries are not permitted to be conducted on vessels as per the definition outlined above.

Societies who run small society lotteries, that is to say lotteries which are not large lotteries (essentially those in which £20,000 (or less) worth of tickets are put on sale where the society’s aggregate proceeds from lotteries do not exceed £250,000 a year) may operate without a Gambling Commission licence provided they register with their local authority.


The purpose of permitted lotteries as set out in the Act is so that societies can raise money for causes that are non-commercial and therefore the Act requires that a minimum of the money raised by the lottery is channelled to the goals of the society that promoted the lottery.  If a small society lottery breaches these limits, it will be in breach of the Act and will be liable to prosecution.

The limits placed on small society lotteries are as follows:


  • A small society lottery must apply at least 20% of the proceeds of the lottery to the purposes of the society.
  • The current limits mean that no single prize in a small society lottery may be worth more than £25,000.
  • Roll-overs are only permitted where every lottery affected is also a small society lottery promoted by the same society, and the maximum single prize does not exceed £25,000.
  • Every ticket in the lottery must cost the same and the fee must be paid to the society before entry into the draw is allowed.


Application and registration

A society must be registered with a local authority throughout the period during which the lottery is promoted. Parts 4 and 5 of Schedule 11 of the Act set out the requirements for societies and licensing authorities as regards registration of small society lotteries.

The society is required to be registered with the local authority in the area where there principal office is located.  If the local authority considers that the society’s principle office is situated in another area it shall inform the society as soon as possible and also notify the other appropriate local authority.

The application must be in the form prescribed by regulations and will need to be accompanied by the prescribed fee of £40.

The licensing authority will record details of the society and keep the details on a register.  Whilst this does not have to be a public register, the Gambling Commission have recommended that licensing authorities make the register available to the public on request.



Paragraphs 47 and 48 of Schedule 11 of the Act set out the grounds for refusal of registrations.  In summary these are:


  • In the previous five years either an operating licence held by the applicant for registration has been revoked or an application for an operating licence by the applicant has been refused;
  • The applicant is not a non-commercial society;
  • A person who will or may be connected with the promotion of the lottery has been convicted of a relevant offence; or
  • Information provided in or with the application for registration is false or misleading.


The Gambling Commission website will maintain details of those people who hold a lottery operating licence. 

Should the licensing authority be concerned that an applicant for registration may have been refused an application for an operating licence, the Gambling Commission will be consulted for further information.

A licensing authority may only refuse an application after the society has had the opportunity to make representations.  Licensing authorities will inform the society of the reasons why it is minded to refuse the registration and the evidence it relied upon to reach that preliminary conclusion.  Licensing authorities have the discretion to decide how to handle representations but it is considered good practice for those procedures to be made available to applicants.  The Gambling Commission is currently considering whether it can usefully provide any further guidance.



A licensing authority can revoke the registration of a society if it thinks that they would have to, or would be entitled to, refuse an application for registration if it were being made at that time.  No revocations can take place unless the society has had an opportunity to make representations and consideration of what procedures shall be put into effect are as outlined in the above paragraph.



Paragraph 51 of Schedule 11 of the Act sets out the processes for appeals against refusal or revocation of small society lottery registrations.  The applicant or registered society may appeal if the licensing authority has rejected an application for registration or revoked the registration.

The appeal must be made within 21 days of receipt of a notice of the decision and must be made to the local magistrates’ court.

On appeal, the magistrates’ court may take the following action:


  • Affirm the decision of the licensing authority;
  • Reverse the decision; or
  • Make any other order (which may include a transitional provision).

To help us consider your society registration we would like you to show us that:

  • You have completed the application form fully in every respect.

WARNING: Registration of your society depends on the location of the office of the society. ONLY SOCIETIES WHOSE OFFICE IS IN PORTSMOUTH CAN REGISTER WITH US

NB: Once registered, you may promote lotteries outside Portsmouth without the need for further registration.

  • That you have carefully considered the amount of money your society is likely to raise. If it is anticipated that any one lottery will raise £20,000 from ticket sales OR the total value of ticket sales in any one calendar year will exceed £250,000 then you must be licensed with the Gambling Commission and not the local authority. Their contact address is:

Victoria Square House
Victoria Square
Birmingham B2 4BP
Tel: 0121 230 6666
Fax: 0121 230 6720

  • That you have provided the registration fee of £40

We will notify you in writing once your society is registered for promoting lotteries.  You will remain registered unless your society registration is revoked by us or cancelled by you.

Remember also that we have the power to inspect and copy any documents relating to any lottery and may also inspect and copy information that you might hold about your lotteries on computer disc.

When promoting each and every lottery you wish to hold please ensure that you abide by the following rules:



The requirements for information that the society must supply to the local authority with whom they are registered are contained within paragraph 39, Schedule 11 of the Act.

Provision of this information allows the local authority to assess whether the financial limits are being adhered to and to ensure that any money raised is applied for the proper purpose.  The information to be submitted is as follows:


  • The arrangements for the lottery (including the date on which tickets were available for sale or supply, the dates of any draw and the value of prizes, including any rollover);
  • The proceeds of the lottery;
  • The amounts deducted by the promoters of the lottery in respect of providing prizes, including prizes in accordance with any roll-overs;
  • The amounts deducted by the promoters of the lottery in respect of costs incurred in organising the lottery;
  • Any amount applied to a purpose for which the promoting society is conducted (at least 20% of the proceeds); and
  • Whether any expenses incurred in connection with the lottery were not paid for by deduction from the proceeds, and if so, the amount of expenses and the sources from which they were paid.


The return must:

  • Be sent to the licensing authority by no later than 3 months after the date of the draw (or the last draw) in the lottery; and
  • Be signed by two members of the society, who must be over the age of 18, are appointed for the purpose in writing by the society or, if it has one, its governing body, and accompanied by a copy of their letter or letters of appointment.

The licensing authority must make the returns submitted by societies in the preceding 18 months available for inspection by the public.


Small societies using an external lottery manager

External lottery managers can be an individual, firm or company appointed by the society to manage a lottery or lotteries on behalf of the society.  They are consultants and generally take their fees from the expenses of the lottery.

External lottery managers must hold an operator’s licence issued by the Commission to manage any lottery including small society lotteries registered with a licensing authority.

Any society which employs an unlicensed external lottery manager commits an offence so societies will need to satisfy themselves that any external lottery manager they wish to employ is licensed by the Gambling Commission.  Societies will be able to do this by looking at the register of licences held on the Gambling Commission’s website.



Lotteries may involve the issuing of physical or virtual tickets to participants.  Schedule 11 of the Act requires that all tickets must:

  • Identify the promoting society;
  • State the price of the ticket which must be the same for all tickets;
  • State the name and address of the member of the society who is designated as having responsibility at the society for the promotion of the lottery, or if there is one, the external lottery manager; and
  • State the date of the draw, or enable the date of the draw to be determined.

“Ticketless” or electronic lotteries must allow the participant to retain the message electronically, or print it.

The Gambling Commission recommends that societies maintain written records of unsold and returned tickets for a period of one year.  The licensing authority is permitted to inspect the records of the lottery for any purpose related to the lottery.


Annual fees

Once registered, the society must pay an annual fee of £20 to the registering local authority.  This fee must be paid within the period of two months which ends immediately before each anniversary of the registration.  If the registered society fails to pay the annual fee, the local authority may cancel the society’s registration.


WARNING: It is an offence to either fail to send a return or to knowingly provide false information in it.


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