A lottery is a game where people buy a chance to win a prize. Most often this will be a lottery ticket, bought for a set price (e.g, £1), where each ticket has an equal chance of winning.
A guide to: Lotteries and Raffles for Charities
Charity lotteries and raffles are a popular way to raise funds while offering supporters the chance to win prizes. This guide explains the different types of lotteries, how they are regulated, what counts as a raffle or lottery, and the legal requirements you must follow to run them safely, compliantly and effectively.
Lotteries and raffles offer an alternative way for people who wouldn’t normally give donations to charity to support good causes. They can also be a way to raise awareness of charities and may lead to lottery players going on to support the charity in other ways in the future.
When organising a lottery, think about what kind of activity you want to do and work out what kind of lottery it would be. The questions to consider are:
- Who will you sell tickets to?
- Where will you sell the tickets?
- When will you sell the tickets?
In answering these questions you should be able to determine which type of lottery you are organising. Some of the most commons types are:
- Small society lotteries
- Incidental lotteries
- Private lotteries
- Customer lotteries
- Large society lotteries
A raffle is a type of lottery, with again people buying a chance to win a prize. Raffles tend to have a range of prizes available and the ticket sales and raffle draw tend to happen as part of the same event, whereas a lottery tends to have a cash prize based on ticket sales.
While raffles and lotteries are engaging and successful, they are one of the more complicated forms of fundraising as they are both counted as gambling activity and are regulated by the Gambling Commission.
There are different types of lotteries, each with different rules and requirements about how they are run. Some can be run without a licence, but for others you will need one. If you do need to obtain a licence to run the lottery, you will need to contact your local council.
The Gambling Commission also regulates charity casinos, race nights, and bingo.
Check the Gambling Commission guidance on fundraising for the rules
Remote gambling is when people participate by remote communication, for example via the Internet, telephone, television or radio. This term only applies to arrangements where participants obtain their lottery tickets electronically (a lottery in which tickets are sold at kiosks, but in which the results are available only via the Internet, is not a form of remote gambling).
For some types of lotteries, remote gambling requires an additional licence from the Gambling Commission.
For some charities, running the lottery themselves and holding the operating licence can be complicated and burdensome. An external lottery manager can operate the licence and manage the lottery on behalf of a charity.
Take a look at Gambling Commission guidance on External Lottery Managers
Prize competitions and free draws are not regulated in terms of gambling and therefore you do not need a licence to organise these activities (although you do still need to be aware of consumer legislation such as those for unfair commercial practices).
Prize competitions are those which are not based wholly on chance. To qualify as a prize competition there needs to be a sufficient level of skill involved that will:
- Prevent a proportion of people from entering
- Prevent a proportion of people who have entered from winning
The outcome of a prize competition is determined by the application of skill, knowledge or judgment; not chance.
A free prize draw is a competition where all entries are free or entries can be made by paying. In this case, free can mean any method of communication charged at a normal rate such as a first or second class stamp.
If organising a prize competition or free prize draw it is important to make sure that they qualify as these and you do not inadvertently organise an illegal lottery.
Gambling Commission guidance on organising prize competitions and free draws
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