Small society lottery guidance notes

From 1 September 2007 the Gambling Act 2005 replaced the provisions of the Lotteries and Amusements Act 1976 and from that date those Societies registered with Torbay Council under the 1976 Act were automatically registered under the new 2005 Act.

The main objectives of the Gambling Act 2005 are:

• Preventing gambling from being a source of crime or disorder, being associated with
  crime and disorder, or being used to support crime;
• Ensuring that gambling is conducted in a fair and open way; and
• Protecting children and other vulnerable people from being harmed or exploited by gambling.

What is a lottery?

A lottery is where persons pay to participate in an arrangement to win one or more prizes. The prizes must be allocated by a process which relies wholly on chance.

Small society lotteries

Small societies are able to operate lotteries by holding a Small Society Lottery Registration, issued by their local authority providing they meet the following criteria:

Society status

The society in question must be 'non-commercial'.

A society is defined as non-commercial, under the Act 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
• For any other non-commercial purpose other than that of private gain.

Size of lottery

The total value of tickets to be put on sale per single lottery must be £20,000 or less, or the aggregate value of tickets to be put on sale for all their lotteries in a calendar year must not exceed £250,000.

If the organisation running the lottery plans to exceed either of these values then they will be classed as a large lottery operator, and must be licensed with the Gambling Commission.

The society will be required to be registered with their Local Authority in the area where their
principal office is located. The cost of the registration is £40.

Limits placed on small society lotteries

• At least 20% of the lottery proceeds must be applied to the purposes of the society;
• No single prize may be worth more than £25,000
• Every ticket in the lottery must cost the same and the ticket fee must be paid to the society (i.e. the society must take payment) before entry into the draw is allowed.
• The Gambling Act 2005 removes the £2 maximum limit on the ticket price.

Regulations under the Act

Paragraph 39 of the Act requires that following a small society lottery a returns form, showing financial information must be completed by the small society and:

• Be sent to the Licensing Authority no later than 3 months after the date of the lottery draw;
• Signed by two members of the Society who are appointed for the purpose in writing by the Society, or if it has one it’s governing body.
• Accompanied by a copy of the written agreement of members appointment.
• Once registered with the Licensing Authority the Gambling Commission will be notified and the Society’s details will be added to their register.

Lottery/raffle tickets

Lotteries may involve the issuing of a physical or virtual ticket to participants (a virtual ticket being non-physical, for example in the form of an email or text messages) (if it is a virtual ticket the participant must be able to retain the message or print it out) Schedule 11 (36) requires that the purchaser of a small society lottery/raffle ticket must receive a document which identifies: 

• The name of the promoting society
• The price of the ticket (must be the same for all tickets);
• The name and address of the member of the society who is designated as having the responsibility at the society for promoting small lotteries, or (if there is one) the external
  lottery manager; and
• The date of the draw.
• No lottery tickets may be sold by or to person under the age of 16 years.
• Raffle tickets should not be sold in the street (this includes shopping malls).

Application forms and annual fees – for a lottery registration

If you would like to apply for a lottery registration under the Gambling Act 2005 please use the online application form. The fee for a new application is £40.

Once a registration has been made it will be of unlimited period unless cancelled by the society or the Licensing Authority. There will not be a renewal application process and you will not be issued with a new permit each year. There will however be an annual fee to be paid
each year which is currently £20. If the annual fee is not paid the Registration will lapse. The Licensing Section will write to you when the annual fee is due.

Incidental “Non Commercial” Lotteries/Raffles – these do not require a registration

An incidental non-commercial lottery is one that is not promoted for private gain and which is incidental to a non commercial event and the tickets are sold and prizes drawn at the event. Examples may include a raffle using cloakroom tickets 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 all the profits went to the society but would be commercial if some of the profits were retained by the organiser.

These incidental lotteries are exempt under the Gambling Act 2005 and therefore can take place without the need for a Small Society Registration providing they meet the following requirements:

• Tickets must only be sold at the premises during the event, and the result must be made public while the event takes place.
• The promoters of lottery may not deduct more than £500 from the proceeds in respect of the cost of prizes.
• The promoters of lottery may not deduct more than £100 from the proceeds in respect of the cost of other expenses, such as printing tickets or hire of equipment.
• The lottery cannot involve a roll over
• Tickets can be cloakroom tickets or printed tickets especially created for the draw.

Further Information

• Post: Licensing Section, Torbay Council, Town Hall, Castle Circus, Torquay, TQ1 3DR
• Phone: 01803 208025
• Email: Licensing@torbay.gov.uk

For more information on the Gambling Act 2005 you may wish to view the Gambling Commission’s website or contact them on 01212306666.