Lottery licence
Registration of Small Society Lotteries
Under the Gambling Act 2005, Hackney Council (the “Council”) is responsible for providing a registration system for small non-commercial society lotteries. The following general guidance will assist societies on this. For further information, please contact the Licensing Service.
What is a “lottery”?
A lottery is an arrangement that satisfies one of these two sets of criteria – simple or complex lotteries.
A simple lottery is where:
- payment is made to participate
- one or more prizes are distributed to one of more members of a class
- prizes are allocated only by chance
A complex lottery is where:
- payment is made to participate
- one or more prizes are distributed to one of more members of a class
- prizes are allocated only by chance through a series of processes
If I promote or facilitate a lottery, is this illegal?
Yes, unless it is either:
- A Large Lottery or Local Authority Lottery licensed by the Gambling Commission (for more details, visit www.gamblingcommission.gov.uk) or
- An exempt lottery, for example a Small Society Lottery (“SSL”)
What is a “society”?
For the purposes of registration, a society is a society or separate branch of a society on whose behalf a lottery is promoted.
To be classed as a society, the society must be established and conducted:
- for charitable purposes (as defined in the Charities Act 2006);
- for the purpose of enabling participation in, or of supporting sport, athletics, or a cultural activity; or
- for any other non-commercial purpose other than that of private gain
It is essential that the society has been established for at least one permitted purpose and that the proceeds of the lottery are devoted to that purpose.
What is a small society lottery?
There are two elements to defining a small society lottery (“SSL”):
- society status: the society must be non-commercial
- lottery size:
- the total value of tickets to be put on sale per single lottery must be £20,000 or less or
- the aggregate value of tickets to be put on sale for all lotteries in a calendar year must not exceed £250,000.
What has the new Gambling Act changed?
The law repealed the old regime under the Lotteries and Amusements Act 1976 and in some areas relaxed the rules on lotteries:
- there are no longer individual limits on the percentage of proceeds that are applied to expenses or prizes although the maximum global amount that can be deducted remains at 80% with a minimum of 20% going to the purposes of the society
- rollovers are now allowed although the maximum single prize must not exceed £25,000 or 10% of the gross proceeds
- automated ticket sales are now allowed
- the £2 limit on ticket prices has been removed
When must the SSL be registered with the Council?
The promoting society of a SSL must be registered with the Council for the duration in which a lottery is held.
What do I do if the society had an existing registration under the Lotteries and Amusements Act 1976?
Up until the 31 August 2007, a first registration application to the Council could be made or renewed under the old Act. From 1 September 2007 these existing registrations automatically convert and the rules described in this guidance will apply. Confirmation of this conversion will be made after the first annual fee of £20.00 has been paid by the society by 1 January 2008 and acknowledged.
An annual fee of £20.00 is to be paid within 2 months of 1 January of each year.
What is the application process for new SSL registrations?
Applications for registration must be made to the Council where the principal office of the SSL is situated. If you submit the application to this Council in error, we will notify you and the correct Council of this.
For applications made after 1 September 2007, you will need to submit:
- an application form which you can obtain from the Licensing Service
- a cheque/postal order for £40 made payable to the London Borough of Hackney; or cash paid in at the Licensing Service office
- a copy of either the terms and conditions or constitution of the society; this will establish what the purpose of the society is and whether the society is running as a non-commercial organisation
- a declaration from the applicants that they represent a bona fide non-commercial society and identifying how the purpose of the society is established
- a declaration from the applicants that they have no relevant convictions (as listed in Schedule 7 of the Gambling Act 2005) that could prevent them from running lotteries
Please note that on a case by case basis, following receipt of the above, the Council may request in writing additional information to establish the purpose of the society and its status.
How do we find out about the outcome of the application?
If the information is accepted as complete, the Licensing Service will go on to determine the application and notify you (by letter) and the Gambling Commission (by email at info@gamblingcommission.gov.uk ) of the decision. The Licensing Service will record the details of the society on its local register.
If the information provided is not complete or there are errors, the application form and accompanying documents will be returned to you for resubmission. You will be expected to submit revised forms and documents including the fee of £40.00.
In what circumstances will the Council refuse the application?
There are 4 grounds in which the Council will notify you in writing of its intention to refuse the application for registration:
- an operating licence held by the applicant for the registration has been revoked or an application for an operating licence made by the applicant for registration has been refused within the last 5 years. In processing the application to register, the Council will consult with the Gambling Commission to note the status of any such licence
- the society can not be deemed non-commercial in nature
- a person who will or may be connected with the promotion of the lottery has been convicted of a relevant offence. In processing the application to register, the Council will consult with the Gambling Commission and Hackney Police on this
- information submitted with the application is found to be false or misleading
What happens if the Council give me reasons as to why they intend to refuse the application?
You will be given an opportunity to make representation either in writing or attend a hearing to convey any relevant representation.
If the society is registered, what happens next?
The registration will last for an unlimited duration unless the Council revokes the registration or cancels it (on written request from the society or where the society have failed to pay the annual fee). In both cases, the Council will notify the society and the Gambling Commission of the action taken.
To ensure the continued registration of the SSL, the annual fee of £20.00 is to be paid to the Council within 2 months which ends immediately before each anniversary of the registration.
The Council may determine to revoke the registration of a society if it thinks that they would have to, or would be entitled to, refuse an application for registration if it were made at that time. Revocations can not take place unless the society has been given an opportunity to make representations at a hearing or in writing.
Is there a right of appeal against the Council’s decision?
Yes. Once the Council notify you of the revocation or rejection, you will have 21 days to lodge an appeal at the relevant magistrates court for decision.
Additional Important Information on Lottery Rules and Lottery Returns: Further Advice to Societies
What are prizes?
An SSL can award cash or non-monetary prizes. Proceeds deducted from the lottery to cover prizes (and expenses incurred with running the lottery) must not exceed 80% of the total proceeds of the lottery. Donated prizes are not included in this 80% but they should still be declared on the returns following the lottery draw.
If SSLs wish to award alcohol as a prize, they should consult with the Licensing Service and Hackney Police Licensing Unit, 2 Lower Clapton Road, London E5 0PA before doing this.
What are the rules on lottery tickets?
(1)Whether a ticket is issued physically or virtually, the ticket must state:
- the name of the promoting society
- the price of the ticket (which is the same for all tickets)
- the name and address of the member of the society who is designated as having responsibility for promoting the SSL or (if there is one) the external “lottery manager” and
- the date of the draw, or information that enables the date to be determined
(2)Lottery tickets may only be sold by persons over 16 years old to persons over 16 years old.
Societies are therefore required to implement effective procedures to minimise the risk of lottery tickets being sold to children. This could be through proof of age schemes or taking action where unlawful attempts to purchase tickets occurs.
(3)The Council advises SSLs:
(a)to maintain written records of any unsold and returned tickets for one year from the date of the lottery draw. The Council may at any time inspect this record for purposes relating to the lottery; and
(b)not to sell tickets in a street (where “street” includes any bridge, road, lane, footway, subway, square, court or passage (including passages through enclosed premises such as shopping malls). However, tickets may be sold from a kiosk in a shop or door to door.
What are the lottery limits?
As a registered SSL, the society must remain within the following SSL limits:
- at least 20% of the lottery proceeds must be applied to the purposes of the society
- no one prize may be worth more than £25,000
- rollovers between lotteries are only permitted where every lottery affected is also a small society lottery promoted by the same society, and the maximum single prize £25,000, and
- every ticket in the lottery is at the same cost and is paid to the society before entry into the draw is allowed
If these limits are not complied with, the Society will be in breach of the Gambling Act 2005 and will be liable for prosecution.
What information must be presented to the Council following each lottery held?
The following information must be submitted to the Council by post or email (licensing@hackney.gov.uk) following each lottery held.
- the arrangements for the lottery, that is
- the dates tickets were available for sale or supply
- the dates of any draw
- the arrangements for the prize(s) – the value of the prize(s), whether prizes are donated, whether there is a roll over
- the total proceeds of the lottery
- the amounts deducted by promoters of the lottery in providing prizes, including prizes in accordance with any rollovers
- the amounts deducted by promoters of the lottery in respect of costs incurred in organising the lottery
- whether any expenses incurred in connection with the lottery were not paid for by deduction from the proceeds, and, if so, the amount of expenses and the sources from which they were paid and
- the amount applied to the purpose for which the promoting society is conducted (this must be at least 20% of the proceeds)
These “Returns” must be:
- sent to the Licensing Service no later than three months from the date of the lottery draw, or in the case of “instant lotteries” (scratch cards) within three months of the last date on which tickets were on sale and
- be signed (electronic signatures are acceptable if the return is sent electronically) by 2 members of the society who must be aged 18 years or over, are appointed for the purpose in writing by the society or if it has one its governing body and accompanied by a copy of their letter or letters of appointment
A template “return” form can be provided to you on request to the Licensing Service.
If after considering the returns the Council consider the lottery relates to a large lottery, it will notify the Gambling Commission (copying this to the Society) that limits have been exceeded. The Gambling Commission will then contact the Society directly.
For further information on the registration of SSLs, please contact the Licensing Service.
Please note that this guidance is not a definitive interpretation of the law and is provided as a general assistance to potential applicants and existing society lottery operators. For more information, please refer to the Gambling Act 2005 and related regulations.
Page updated: 19 Apr 2011
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