Most people think of raffles as small, fun and harmless things that can add a little something to an event or a club budget. However, in the UK, there are strict laws regarding gambling, and raffles are treated as lotteries under the Gambling Act 2005. This policy sets out our organisation’s understanding of the law, showing where, when and how raffles would be legal, and what sort of raffles should be avoided due to issues of legality.
Contents
- Definitions
- Reading material
- Legal forms of raffle (not requiring a licence)
- Legal forms of raffle (paperwork required)
- Illegal forms of raffle
- Miscellaneous rules
Definitions
The terms “raffle” and “lottery” will be used interchangeably in this policy, according to the definitions in the Gambling Act 2005.
Reading material
A good introduction to the gambling legislation in plain English is the information about fundraising and promotion on the Gambling Commission website.
The Gambling Commission has also produced a quick guide to Running a Lottery and a guide to Organising Small Lotteries, both of which are quite helpful reading. These links seem to have been removed from the Gambling Commission website.
You can read the Gambling Act 2005 online at the government’s legislation website.
Legal forms of raffle (not requiring a licence)
There are only certain forms of raffle that are legal, and they take quite strict forms. This section will discuss the legal forms of raffle (that do not require an operating licence) and the requirements for their conduct, along with our policy on specifically how we would go about running them.
Incidental lotteries
It is possible to run a raffle at a commercial event, i.e. an event that we are running anyway that may have the purpose of generating a profit for our organisation. However, the raffle itself may not be run for commercial purposes, and all proceeds must be raised for a charitable cause or for donation to a charity.
Raffle tickets may only be sold on the premises at the time of the event. Tickets may not be sold online, or beforehand. The raffle draw itself must take place during the event, and the announcement about the winner(s) may take place either during the event or afterwards. It must be made clear to participants when the draw will be made and when the results will be announced.
There is no maximum limit to the funds raised by this kind of raffle. Prizes purchased must have a maximum total value of £500, although any value of prizes may be donated to this kind of raffle. No more than £100 may be deducted for any other expenses. No roll-overs are allowed.
This kind of raffle does not require an operating licence from the Gambling Commission.
Our policy for incidental raffles
It is our policy that any raffles held at commercial events must be predicated upon raising money for a charitable cause, and the organisation should not expect to make any income or profit from the activity. Once a charitable cause is chosen, any announcement about the lottery must begin with the phrase:
We are raising money for [this charitable cause] and all proceeds will go towards that.
We will announce the raffle at the beginning of the event and give event participants the chance to buy tickets in person at the event until the draw. We will also announce at the beginning of the event when the draw will take place.
We will perform the draw at the event, in front of the event participants, and will announce the results immediately. After performing the draw and announcing the results, we will announce how much money has been raised by the raffle, and again announce the charitable cause for which the money has been raised.
Further information about incidental raffles
https://www.gamblingcommission.gov.uk/public-and-players/guide/how-to-run-a-lottery-or-fundraiser
Private society lotteries
It is possible to use a raffle for fundraising, although the funds raised can only be for charities or good causes and cannot be for private or commercial benefit. It can be used to raise funds for any charitable cause for which the society may have been established to pursue, or it can be used to raise funds that will be donated to a charity or similar charitable purpose.
This kind of raffle does not require an operating licence from the Gambling Commission. For ticketing requirements, please refer to:
https://www.gamblingcommission.gov.uk/public-and-players/guide/how-to-run-a-lottery-or-fundraiser
The raffle must be conducted on premises and cannot be held online. It must be part of a non-commercial event (i.e. an event at which the organisation does not make any kind of profit beyond fundraising for a charitable cause). A non-commercial raffle held for members of a club at a non-commercial event counts as a “private society lottery”. Tickets may be sold to members of the club and to anyone on the premises of the club, but may not be sold to the general public outwith the premises.
No roll-over is permitted. The full income raised by the lottery (minus any costs for prizes or reasonable expenses involved in running the lottery) must be put towards the charitable cause. There must be a limit placed on participation fees and value of prizes, and entry into the raffle cannot be done remotely.
Our policy for private society lotteries
It is our policy that any such private society lottery must be predicated upon raising money for a charitable cause, and the organisation should not expect to make any income or profit from the activity. Once a charitable cause is chosen, any announcement about the lottery must begin with the phrase:
We are raising money for [this charitable cause] and all proceeds will go towards that.
When organising a private society raffle, we will keep the total value of all prizes beneath £100, preferably beneath £50, and will limit any individual participation to a maximum of £20.
The raffle must be part of a non-commercial club event that we are organising anyway, and thus would make sense to be part of a non-commercial fundraising event. The raffle will take place at the non-commercial club event, and all tickets must be sold at that event or on the event premises beforehand (but not online).
Once the raffle has concluded, the proceeds from the raffle will be put towards the charitable cause, and we will announce how much money was raised for the cause, and that the money has been donated or otherwise put towards that cause.
Furthermore information about private society raffles
http://www.legislation.gov.uk/ukpga/2005/19/part/14
Customer lotteries
A business (or any organisation) can promote themselves by running a lottery, where tickets are sold to customers, and a draw is held for some kind of prize. However, the raffle is not allowed to make a profit.
All the money raised must be spent on prizes, none of which may be worth more than £50. No roll-overs are permitted, and only one such lottery may be held in any seven-day period.
Tickets can only be sold on the premises and cannot be advertised online or by email.
This kind of raffle does not require an operating licence from the Gambling Commission.
Further information about customer raffles
Free draws
Genuinely free draws, where there is no entry fee, are not considered gambling, according to the Gambling Act 2018. It must be entirely free-of-charge for people to enter the draw, and the draw may be done for commercial purposes and profit. Because it is not regulated, it can be advertised and people can enter the draw both online and in person at the premises.
However, since it is not considered gambling, it must not be referred to as a “raffle” or as a “lottery”; it must be referred to as a “free draw”.
Offering a small prize would be quite reasonable in exchange for people providing their contact details, for “liking” and “sharing” a page or post on social media, for referrals or recruiting efforts, or for becoming or having been a customer of the organisation. Other options might be quite reasonable, but it is a legal requirement that there is no entry fee to participate.
This kind of raffle does not require an operating licence from the Gambling Commission.
Our policy for free draws
Our policy on free draws is that when planning one, the organisation should not plan on making any profit directly from the draw, although indirect profit could be expected by way of increased customer activity thereafter, or enhanced word-of-mouth advertising, or suchlike. Furthermore, the organisation should include the following text in any advertisements or written announcements:
This is a free draw and there is no financial cost to enter the draw. As such, this counts as a “free draw” and is not regulated by the Gambling Commission. The draw complies with the laws for lotteries in the Gambling Act 2005.
Further information about free draws
http://www.legislation.gov.uk/ukpga/2005/19/section/14
Legal forms of raffle (paperwork required)
No lotteries in the UK can be run for commercial profit (or even just to contribute towards the budget of an event or organisation), even if you have a licence for running larger lotteries.
Small society lottery
Small society lotteries do not require an operating licence from the Gambling Commission, but they DO require registration with the council in the area where your organisation’s head office is located.
“Small societies” are societies (organisations) that are established and run for charitable purposes, or for enabling participation in sport or a cultural activity, or for any non-commercial purpose. Most HEMA clubs would count as “small societies” as they exist for the purpose of enabling participation in the sporting activity of HEMA.
“Small society lotteries” are lotteries that have maximum proceeds of £20,000 for any single draw, and maximum proceeds of £250,000 over a year.
At least 20% of the proceeds must go towards charitable causes; no more than 80% of the proceeds may be spent on prizes or expenses.
Further reading about small lotteries
Large society lottery
If you want to run a society lottery for more than £20,000 in a year, you must get an operating licence from the Gambling Commission. Please read the official advice for applying for an operating licence:
https://www.gamblingcommission.gov.uk/contact-us/guide/page/operating-licence-applications
This might be what you would look at doing if you wanted to run a UK-wide lottery for raising a very large amount of money for a good cause.
Illegal forms of raffle
Many forms of raffle are actually illegal. In this section, we will discuss types of raffle or elements involved in a raffle that might seem straightforward but that are actually illegal.
Raffles for profit
In the UK, no lottery may be run for commercial profit (even just to contribute towards an event budget or to the running costs of any organisation), even if you have a remote or non-remote operating licence from the Gambling Commission. All lotteries must be run for charitable causes. There is no legal way to use a raffle to help boost your budget for an event or to help contribute towards running costs of the organisation.
Any lottery in the UK running for commercial purposes is illegal.
Advertising a raffle online
Although it may seem like a good way to make a bit of income for the organisation’s budget, promoting a raffle online and selling raffle tickets online is actually illegal under the Gambling Act 2005. It is also illegal to promote online a raffle that someone else is running illegally.
The only exception is when the raffle is being run online for charities and other good causes. The organisation running the raffle on behalf of a charity or good cause must hold the necessary operating licence from the Gambling Commission and must ensure that every aspect of the raffle is legal according to the Gambling Act 2005 to avoid breaking the law.
Our policy for advertising raffles online
Our policy is that we will not post or share anything about any raffle or lottery online, nor will we give any “signal boost” online to a raffle that someone else is running (regardless of whether they are running it legally offline in premises or running it online illegally). Better to be safe than sorry when it comes to potentially falling foul of gambling legislation.
Further information about advertising a raffle online
https://www.gamblingcommission.gov.uk/public-and-players/guide/page/promoting-lotteries
Miscellaneous Rules
There are some other rules to be kept in mind when considering running a raffle of any kind.
Announcing the winner
Companies in the UK must follow the CAP Code, which states that:
Promoters must either publish or make available on request the name and county of major prizewinners and, if applicable, their winning entries except in the limited circumstances where promoters are subject to a legal requirement never to publish such information. Promoters must obtain consent to such publicity from all competition entrants at the time of entry. Prizewinners must not be compromised by the publication of excessive personal information.
This means that we don’t need to publish the names of winners, but we do have to say who won if we are asked about it. “Major prizes” refer to the top prizes in a promotion, rather than to the value of the prizes.
It must be made clear when selling the tickets that by entering the promotion, the participant gives their permission for their name to be used in this fashion. We should not give out any more information than name and county about any winner.
Alcohol as a prize
There are no rules against offering a sealed container of alcohol (an unopened bottle of wine is fine; a half-finished bottle of wine raffled off to pay the bill is not allowed!) as a prize for a raffle.
An under-18 may be involved in the process of selling tickets for an alcoholic prize, and may also be involved in advertising the prize and the raffle at an event; however, an under-16 may not be involved in advertising a raffle or selling tickets, full stop.
Under-18s may not win an alcoholic prize.
No personal or premises licences for alcohol are required in order to have an alcoholic prize for a raffle.
Selling tickets
Depending on the type of raffle, the rules for selling tickets may be different.
However, for the types of unlicensed raffle described above (incidental, private, and customer), we cannot sell tickets in advance of the event; tickets sales may only take place at the event itself. Tickets may never be sold online, they may only be sold in person at the premises.
As a rule of thumb, there is nothing wrong with setting a flat rule of “£1 per ticket” or (for incidental lotteries) offering a discount such as “£1 per ticket or 6 tickets for £5”, as long as the same rules apply to all participants. The only exception is for the incidental lottery, where there are no firm rules on how tickets must be priced – tickets may be offered at one price earlier in the event and then at a discounted price to get rid of unsold tickets towards the end of the event.