Running lotteries responsibly
Lotteries, including the likes of raffles, tombolas, and sweepstakes, are a tool that fundraisers hold in their repertoire as a great way to raise money.
Just as with any other method of fundraising, lotteries should follow the Code of Fundraising Practice; but lotteries are also a form of gambling so extra consideration should be given to additional safeguards that may need to be in place.
What can you do to ensure you promote and conduct your lottery responsibly?
If someone is struggling to control their gambling behaviour it can cause stress, depression, anxiety, or they may fall behind at work and worry about money. Problem gambling very difficult to detect, but fundraisers might look out for supporters that:
• Always talk about gambling
• Chase losses
• Gamble until all/most money is gone
• Need to gamble with larger amounts of money or for a longer time to get the same feeling of excitement or buzz
While the association between lotteries and problem gambling is small, it is important that fundraisers are aware of the potential risk. To make sure lotteries are a safe and positive experience for supporters, fundraisers should consider displaying gambling warnings in their communication materials, as well as knowing where to signpost those supporters who may require more information and advice (see end).
People in vulnerable circumstances
Ultimately lotteries should be fun to play, while giving people the opportunity to support the issues they care about. That said, the nature of lotteries makes it all the more important to be aware that fundraisers may come into contact with people in a vulnerable circumstance, or who need additional support to make an informed decision. Fundraisers have a role in providing help, advice, or support to that person.
Fundraisers should ensure that people in vulnerable circumstances and others are protected from unreasonable intrusion into their privacy, unreasonably persistent approaches or undue pressure to donate to the charity or play the lottery. For further information see our guidance on Treating donors fairly.
Self-exclusion is a facility for those that have decided that they wish to stop gambling and wish to be supported in their decision to stop. Fundraisers who operate lotteries could consider offering this service to supporters. To do so:
- Establish a form and submission function
- Decide how long the exclusion lasts (generally 6 months)
- Take reasonable steps to prevent excluded persons from participating in lotteries during this time.
- Remove excluded persons’ names and details from any marketing databases the lotteries use.
These rules ensure the marketing communications of 'large' and ‘small’ society lotteries are socially responsible - with particular regard to the need to protect children, young persons under 18 and other vulnerable persons from being harmed or exploited by advertising that features or promotes lotteries.
Fundraisers should bear in mind that marketing communications “must not portray, condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm”.
Fundraisers should consider taking professional advice on potential tax issues, briefly:
• Income/corporation tax: In England and Wales, the ticket sale proceeds of a lottery run by a charity are tax-exempt, provided it is run in accordance with the law, under the proper licences or registration, where applicable. The proceeds of lotteries run by other organisations are subject to income or corporation tax, as applicable
• VAT: For the purposes of VAT, the sale of lottery tickets is an exempt supply i.e. VAT is not chargeable to purchasers of tickets and VAT incurred in connection with the lottery cannot be reclaimed