Lotteries can be a great way to raise funds. Prizes can be donated, thereby reducing your costs. Funds raised by small and private lotteries are unrestricted and income from private and small lotteries are exempt from tax. Even if the lottery is for charitable causes it must, however, be conducted in accordance with the law. Any type of draw where participants pay money or make a contribution “in kind‟ to have an equal chance of winning a prize counts as a “lottery.‟ Activities such as raffles, tombolas, prize draws, sweepstakes and even “name the teddy‟ draws all count as lotteries.
For the purposes of your student group, you need to be aware of two different types of lotteries: ones that are held as part of an event and are concluded (as in prizes received) before the end of such event, and those that are held as activities in their own right, where the sale of tickets either runs across numerous days and/or where the prize draw is at a separate time or location to the event where tickets were sold.
Depending on which of the two types of raffles you hold there are a number of things you need to consider to ensure you are compliant with licensing requirements as raffles fall under the Gambling Act 2005. Below explains your role and responsibilities for each.
When you are holding a lottery/raffle as part of an event you do not need to report your raffle to the licensing authority, however you must ensure your lottery/raffle complies with the following requirements:
None of the sums raised are to be used for private gain.
Tickets MUST only be sold during the event, on the premises where the event is held.
The draw must take place during the event.
Deductions from profits going to charitable causes should not exceed £100 in costs and £500 in prizes.
Tickets must be sold at the same price with no offers such as 3 tickets for the price of 2.
If your lottery/raffle does not comply with all of the above criteria, then you must follow the process below to run your lottery/raffle.
First in order for your student group to run a lottery/raffle you must inform the Union by completing this Google Form. The Google Form should be completed no later than the date of the prize draw.
Additionally, you must ensure that your lottery/raffle follows the following guidelines:
None of the sums raised are to be used for private gain.
There should be a description of the lottery/raffle or those running it need to be able to explain:
What the lottery is raising funds for;
What the prizes available are;
When the lottery ends (ticket sales stop) and when the prizes will be drawn
You should make a record of the following information to ensure you can complete the Google Form above:
Start and end date of ticket sales
The total amount of money raised from ticket sales
The cost of any expenditure incurred that is taken from the ticket sales
The total value of the prizes handed out (Whilst this is unlikely to happen, please note that the value of any individual prize should not exceed the value of £25,000.)
Every ticket in the lottery must cost the same.
If you’ve got any questions or require further information about holding a raffle please get in touch with our Community Manager, Connor Briggs.