Newcastle City Council - Lotteries

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Definition of a lottery

A lottery is an arrangement which satisfies the statutory description of either a simple lottery or a complex lottery

An arrangement is a simple lottery if:

  • persons are required to participate
  • one or more prizes are allocated to one or more members of a class: and
  • the prizes are allocated by a process which relies wholly on chance.

An arrangement is a complex lottery if:

  • persons are required to participate
  • one or more prizes are allocated to one or more members of a class;
  • the prizes are allocated by a series of processes; and
  • the first of those processes relies wholly on chance.

The Gambling Act 2005 creates two broad classes of lottery:

  1. Large society lotteries and lotteries run for the benefit of local authorities registered with the Gambling Commission
  2. Exempt lotteries - including small society lotteries which are registered with the Licensing Authority in which the principal office of the society is located.

Large Society and Local Authority Lotteries

If the arrangements for a society lottery are such that the total proceeds (ticket sales) in a single event exceed £20,000 or proceeds of previous lotteries in same calendar year reach £250,000 then the lottery is deemed a large lottery and may only be run under a lottery operating licence by the Gambling Commission.

Local Authority Lotteries may use the net proceeds of it’s lottery for any purpose for which it has power to incur expenditure.

Application for such licences is undertaken with the Gambling Commission.

Exempt Lottery Types under the Gambling Act 2005

  • Incidental Non-Commercial Lotteries - commonly held at charity (non-commercial) fund raising events (e.g. school fete, dance or sporting event).
  • Customer lotteries - these can only be run by a business, at it's own premises and for its own customers. No prize can be more than £50 in value. This type of lottery cannot make a profit, and is unsuitable for fundraising. 
    • Private Lotteries - only members of the society and those on society premises can participate. The lottery can only be promoted by an authorised member for a purpose for which the society is conducted and the society can be any group provided it is not established and conducted for purposes connected to gambling.  The proceeds of the lottery must go to the purposes of the society.
    • Work lotteries - only people who work together on premises may participate. The promoter of the lottery must work on the premises. The lottery must not be run for profit and all the proceeds must be used for prizes or reasonable expenses incurred in organising the lottery e.g. a Grand National sweepstake. As this type of lottery cannot make a profit it it therefore unsuitable for fundraising.
    • Residents' lotteries - held by people who live in the same premises. The promoter of the lottery must reside on the premises and tickets can only be sold to other residents of the same premises. The residency requirement can still be satisfied where the premises are not the sole premises in which a person resides (e.g. a students halls of residence). This type of lottery cannot make a profit, and so is unsuitable for fundraising.

Small Society Lotteries

Small Society Lotteries are held by a non-commercial society and require registration with the Licensing Authority in which the principal office of the society is located. 

Small Society Registration Lottery Form (pdf 30kb)