Lotteries

The current Small Societies Lotteries Register is available from the 'Related Downloads' section on this page.

The Gambling Act 2005 specifies a licensing regime for large non-commercial society and local authority lotteries, to be administered by the Gambling Commission; and a registration system for small non-commercial society lotteries, to be administered by licensing authorities. The licensing authority for gambling is the local licensing board.

The Act sets out a definition of a lottery and provides that promoting or facilitating a lottery is illegal, unless it falls into one of two categories of permitted lottery, namely:

Licensed Lotteries

These are large society lotteries and lotteries run for the benefit of local authorities that are regulated by the Commission and require operating licences, and

Exempt Lotteries

There are 4 types of exempt lottery that are expressly permitted under Schedule 11 to the Act, including the small society lottery. The other types are discussed later.

What is a Lottery?

Lotteries are arrangements where people pay to participate for the chance of winning a prize and are either simple or complex.

A simple lottery is where:

• Persons are required to pay to participate.
• One or more prizes are allocated to the participants.
• Prizes are allocated wholly by chance.

A complex lottery is where:

• Persons are required to pay to participate.
• One or more prizes are allocated to the participants.
• Prizes are allocated wholly by chance.
• The prizes are allocated by a series of processes.
• The first of these processes relies wholly on chance.

Lotteries differ from other types of gambling activity as the minimum participation age is 16 rather than 18 as for most other types of gambling.

Large society lotteries – societies that run lotteries where the proceeds or ticket sales in a single lottery exceed £20,000 or the proceeds in all lotteries run in the same calendar year exceeds £250,000, are defined by the Gambling Act 2005 as running large lotteries and as such are regulated by the Gambling Commission.

Small society lotteries – these are where the proceeds or ticket sales in a single lottery are £20,000 or less and £250,000 or less in all lotteries in the same calendar year. They are exempt from holding an operating licence from the Commission, but must be registered with their local licensing board.

These lotteries must only be run in support of good causes, such as charity fundraising or enabling participation in or supporting sport, athletics or a cultural activity and cannot be run for private or commercial gain.

There are also 3 other categories of exempt lottery, which are not required to be run under operating licences and do not require registration with any statutory body.

• Exempt Incidental Non-Commercial Guidance.
• Exempt Private Lotteries Guidance.
• Exempt Customer Lotteries Guidance.

Further information is available from the 'Related Downloads' section of this page.

What About Free Draws and Prize Competitions?

Free draws and prize competitions are free from statutory control under the Gambling Act 2005. Further information is available from the Related Downloads section.

What About Race Nights?

Depending on how an event is structured, a “race night” may be operated under either the non-commercial gaming provisions in Part 14 of the Act, or as an incidental non-commercial lottery under Part 1 of Schedule 11. Further information on holding a Race Night is available from the Related Downloads section.

Details of the rules governing the operation of a small society lottery can be read in Parts 4 and 5 of Schedule 11 to the Gaming Act 2005. The Act also sets out a number of offences that apply to lotteries.

There is no limit on the percentage of proceeds that may be applied to expenses or prizes. However, the maximum global amount that can be deducted for expenses and prizes is 80% and at least 20% of the proceeds of the lottery must be applied to a purpose for which the society is conducted.

Rollovers are permitted, if each lottery affected is a small society lottery promoted by or on behalf of the same society.

Societies are advised to contact the address at the end of this document if they are considering items containing alcohol as prizes. This is in order to ensure that licensing law is not breached.

Tickets

Tickets must state:

• The name of the promoting society.
• The price.
• The name and address of:

1. The person within the society responsible for the lottery promotion.

2. The external lottery manager*, if there is one.

• The date of the draw or each draw in the lottery or information which enables the date or each date to be determined.

* External lottery managers are required to hold operating licences from the Gambling Commission to manage any lottery, including small society lotteries. If further information about this is required, contact the address at the end of this document.

Tickets can take the form of an electronic message such that the recipient can retain the message or print it by email or text message.

There is no restriction on the price for a ticket. However, the price of each ticket must be the same and the society must take payment for the ticket fee before entry into the draw is allowed.

Orkney Islands Area Licensing Board

Licensing boards are required under the Act to notify the Gambling Commission of small society registrations.

The Orkney Islands Area Licensing Board retains the right to ask applicants for a copy of their terms and conditions or their constitution to establish that they are a non-commercial society. The Board may also require applicants to provide a declaration that they represent a genuine non-commercial society.

The Board also advises all small society lottery operators that they should retain records of any unsold and returned tickets for a period of one year from the date of the lottery draw. The Board is permitted to inspect the records of the lottery for any purpose related to the lottery.

Persons signing Returns on behalf of societies will require to provide evidence in writing that they are appointed for that purpose by the society or its governing body. Returns must be signed by 2 members of the society aged 18 or over and must be submitted to the local licensing board following each lottery held. The Return must be submitted no later than 3 months after the date of the lottery draw, or, in the case of ‘instant lotteries’ or scratch cards within 3 months of the last date on which tickets were on sale.

The Act provides for circumstances where a licensing board may refuse or revoke a registration and consequent appeals. Further information can be obtained by reading Part 5 of Schedule 11 to the Gaming Act 2005, available on the internet, and, thereafter, by contacting the address at the end of this document.

Registration

Applicants must apply to the local licensing board for registration under the 2005 Act. Application forms and Returns forms can be obtained from the Related Downloads section.

The requirements relating to registration and the filing of records are set out in Parts 4 and 5 of Schedule 11 to the Act.

Applications must be accompanied by a fee of £40 and a copy of the society’s terms and conditions or constitution.

If the application is granted, registration shall run for an unlimited period, unless cancelled. There will be an annual fee of £20 payable each year. If the annual fee is not paid, the licensing board may cancel the society’s registration.

The Gambling Act 2005 can be accessed from the 'Related Sites' section of this page.

Further information can also be accessed from:

• Department for Culture, Media and Sport.
• Gambling Commission.
• Scottish Government.

If you require further information about this topic please contact the Licensing Team, Legal Services, on telephone: 01856873535 extensions 2229 or 2232 or via email.

If you would like to see someone in person to discuss a licensing matter please contact the Licensing Team to make an appointment.

Data Protection Information - Gambling Licences

The General Data Protection Regulation (GDPR) came into force on 25 May 2018.

Application forms and guidance issued by Orkney Islands Area Licensing Board (the Board) in relation to gambling licences will be updated.

In the meantime, an information sheet accompanies documentation provided to applicants and is published in the 'Related Downloads' section on this page.