Raffles and Lotteries
Lotteries are games where people buy a chance to win a prize. Raffles are a form of lottery and are widely used by fundraising organisations of all sizes, whether organised internally or by volunteers. The legislation surrounding lotteries can be far-reaching and it is important to be confident that you fully understand and comply by the regulations.
When thinking about planning a lottery (including a raffle), the first step needs to be to establish whether it is indeed a lottery that you are organising and whether a licence will be needed. To determine whether you need a licence, three important questions to ask yourself 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, non-commercial lotteries;
- private lotteries;
- customer lotteries; and
- large society lotteries.
If you are concered about that your competition may not make enough money to cover costs, you may want to think about taking out insurance. Alternatively, you could think about approaching a local business to sponsor the prize.
Code of Fundraising Practice and Guidance
The Raffles and Lotteries section of the Code and supporting guidance explain the difference between different types of lottery and the different rules to be aware of in regards to licences, tickets and prizes.
The Code of Fundraising Practice highlight the law and best practice for a range of fundraising techniques.
If the lottery is being used as a means of collecting participants' data, the Data Protection section of the Legal Appendices of the Code may also be particularly relevant.
Other Institute Resources
The Institute has also created an Introduction to Raffles briefing. This briefing is designed to be read in conjunction with the Code and provides a basic overview for people unfamiliar with using raffles to fundraise.
More information about organising a raffle is available on the How2Fundraise website. The site is aimed at volunteer fundraisers and includes a wealth of fundraising ideas and how-to guides.
Raffles come under the remit of the Gambling Act 2005 and are regulated by the Gambling Commission.
The Department for Culture, Media and Sport has also produced some useful facts sheets that include information about Bingo and Race Nights.
Prize Competitions and Free Draws
Prize competitions and free draws are not regulated in terms of gambling and therefore you do not need a licence to organise these activities.
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; or
- 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 or for free. 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.
The Gambling Commission has produced guidance for people organising a prize competition or free prize draw.
Although not falling under gambling law, you still need to be aware of consumer legislation such as those for unfair commercial practices. The Office of Fair Trading and Department for Business, Innovation and Skills has produced guidance on these regulations.