This page covers some of the usual questions asked about lotteries. It is not a definitive description of all the rules and regulations that apply to lotteries.
Reference should be made to the Lotteries and Amusements Act 1976 and the Lotteries Regulations 1993 for precise details of the law. Copies are available from the Stationery Office. The Gaming Board for Great Britain has published Lotteries and the Law, which is a useful source of information.
Definition of a lottery There is no legal definition of a lottery although it is generally held to be a distribution of prizes by lot or chance where entry is secured by the payment of a stake.
The general rule is that lotteries cannot be run for private or commercial gain.
Different types of lottery and who can run them
Small lotteries:
Section 3 of the 1976 Act permits the holding of lotteries as incidental features of other entertainment, such as dinners, fetes, bazaars or sporting events. Proceeds must be devoted to purposes other than private gain. Tickets can only be sold on the premises and during the entertainment, and no more than £250 can be appropriated for expenses incurred by operators in purchasing prizes. No money prizes can be awarded.
Private lotteries: Section 4 of the 1976 Act permits private lotteries in which the sale of tickets is restricted to members of a society established and conducted for purposes not connected with gaming, betting and lotteries and any other person on the society's premises; or to persons all of whom work or reside on the same premises. The proceeds of the lottery must be devoted to the provision of prizes, or to the purposes of society, or both.
Society lotteries: Section 5 of the 1976 Act permits lotteries run by societies established and conducted for charitable, sporting, cultural or similar voluntary purposes. They must be registered with the local authority (or the Gaming Board in the case of large lotteries) and all proceeds must go to a scheme approved by the society.
Local Authority lotteries: Section 6 of the 1976 Act permits lotteries conducted by local authorities.
Registration requirements There are no registration requirements for lotteries covered by sections 3 and 4 of the 1976 Act.
Any society lottery wishing to promote a lottery in accordance with Section 5, must itself be registered with either the appropriate local registrations authority (in England, usually a district council) or the Gaming Board.
A society lottery must register with the Gaming Board if the total value of tickets to be put on sale in any lottery is to exceed £20,000, or if the value of tickets to be put on sale in any lottery, added to the value of those already sold during the same calendar year, is to exceed £250,000.
All Section 6 Lotteries (Local Authority lotteries) require Gaming Board registration.
Under no circumstances may steps be taken to promote a lottery under a scheme submitted to the Board and until notification has been given that the society has been registered.
Ticket prices and prize limits Lottery tickets may not be sold to persons under 16 years of age and all tickets must be paid for before they are entered into the draw.
The price for a ticket for a Society's lottery or a local authority lottery must not exceed £2, and there is a limit on proceeds of £2 million for single lottery or £10 million for all lotteries in calendar year.
The limit on prizes is £25,000 for a single prize, or 10% of the proceeds whichever is higher. Not more than 55% of proceeds may be used for prizes.
With regard to expenses limits, up to 35% of proceeds may be used for expenses (Gaming Board authorisation may be required in some circumstances).
The combined prizes and expenses limit is, therefore, 80% of the lottery's proceeds, preserving 20% of the lottery's proceeds for the good cause.
Registration fees for Society and Local Authority Lotteries:
Please refer to our fact sheet on Gaming licenses, permits and registrations.
National Lottery The National Lottery was introduced under the National Lottery etc Act 1993. In May 1994 Camelot was awarded a seven-year licence to run the National Lottery, this licence was awarded again to Camelot in 2001 for a further seven years. The National Lottery Commission regulates the Lottery. Responsibility for the law lies with the Department for Culture, Media and Sport.
Unlike the National Lottery, no form of rollover is permitted for a society lottery. Once the date has been declared, the lottery must proceed irrespective of the number of tickets sold.
Commercial sales promotions DCMS is often asked by businesses about the legality of running a lottery (say to win a car) as a commercial sales promotion, where an entry fee is required and the result determined by chance.
Whilst DCMS is unable to offer legal advice, we would caution against running what may, effectively, be an illegal lottery. The law does not permit commercial lotteries. We would always recommend anyone in this situation to seek independent legal advice.
The law on prize competitions is set out in a separate fact sheet.