Do we need a licence to run a raffle at our fundraising event?

England and Wales: This page sets out the position in full, including the offences and the penalty. Scotland: the same law and the same conditions — the Gambling Act 2005 covers Great Britain — except that a registered lottery registers with the licensing board, which sets its own fees. Northern Ireland: covered, and different law altogether — a separate Order with stricter raffle conditions, a duty to tell the police in advance, and offences that can go to the Crown Court.

The breach almost everyone makes: selling tickets in advance

A raffle at a charity’s own event rarely needs a raffle licence at all. The common way to break the law is to sell tickets in the weeks before the event, to sell more of them. It seems harmless. It takes the raffle outside the law.

This page is the raffle part of running an event. If the raffle is one of several things happening on the day, start with run a fundraising event lawfully.

In Great Britain, the Gambling Act 2005 exempts a raffle held as part of an event. The raffle must meet every condition in Part 1 of Schedule 11. The ticket condition is paragraph 7(1). No ticket may be sold or supplied, verbatim, “otherwise than— (a) on the premises on which the connected event takes place, and (b) while the connected event is taking place.”

Both limbs apply:

• Tickets sold at the fete are fine.
• Tickets sold door to door the week before are not.
• Tickets sold online the night before are not.
• Tickets sold at the venue an hour before the doors open are not either, because the event is not yet taking place.

This is not a question of being discouraged. It is a condition of the exemption. Break it, and the raffle is a lottery that is neither licensed nor exempt. Promoting one is an offence, committed by whoever promotes it, which can mean the individuals who run the raffle.

What trustees take on personally is covered when you understand what you are personally taking on.

If you need to sell tickets in advance, that is possible. It is a different kind of lottery, and it has to be registered. See “When you need to register instead” below.

The other incidental lottery conditions, word for word

A paraphrase of a lottery condition is no use to anyone. Here they are as Schedule 11 of the Gambling Act 2005 (Great Britain) states them. You must meet all of them.

• Prize costs (para 3). The promoters may not deduct from the proceeds more than a prescribed sum “in respect of the cost of the prizes (irrespective of their actual cost)”. That sum is £500. Donated prizes cost you nothing, so they are the simplest way to stay inside it.
• Running costs (para 4). No more than a prescribed sum “in respect of costs incurred in organising the lottery (irrespective of the amount of the costs incurred)”. That sum is £100.
• Purpose (para 5). Verbatim: “An incidental lottery must be promoted wholly for a purpose other than that of private gain.”
• No rollover (para 6). Verbatim: “The arrangements for an incidental lottery must not include a rollover.” An unclaimed prize cannot be carried into the next event’s draw.
• Tickets (para 7(1)). Sold or supplied only on the premises of the event, and only while it is taking place.

Two things are not on that list, and people often think they are. Nothing in Part 1 caps the ticket price. And there is no longer any rule that the result must be announced during the event. That rule went in 2016.

Why “incidental non-commercial lottery” is the wrong name

An incidental lottery is a lottery held as part of another event, such as a raffle at a fete. In Great Britain it is exempt from licensing if it meets every condition in Schedule 11. Much guidance still calls this an “incidental non-commercial lottery”. That name is out of date in Great Britain.

On 6 April 2016, the Legislative Reform (Exempt Lotteries) Order 2016 took the word “non-commercial” out of the Gambling Act 2005 exemption in Great Britain. It removed the test of a “non-commercial event”. It also removed paragraph 7(2), the duty to declare the result at the event.

Guidance that still uses the old name is describing law that ended a decade ago. A raffle at an event that would have failed the old test can now qualify.

That change was for Great Britain only. Northern Ireland kept both rules, as its own section explains.

When you need to register instead: the small society lottery

If you want to sell tickets before the draw, or away from an event, the usual route for a charity is a small society lottery. A small society lottery is a lottery a charity promotes for its own purposes, registered in advance, whose proceeds stay within the limits below.

• Who registers it. In England and Wales, the local authority. In Scotland, the licensing board.
• The fee. In England and Wales, £40 to register and £20 a year. In Scotland the licensing board sets its own fee, because the Great Britain fee regulations do not apply there.
• How much must go to the cause. At least 20% of the proceeds must be applied to the charity’s purposes.
• The biggest prize. £25,000.
• Ticket price. There is no maximum ticket price in Great Britain. Every ticket must cost the same.
• The return. Within 3 months of the draw, a return goes to the registering authority. It is signed by two adult members of the charity appointed in writing.

The limit that matters most is the line between a small and a large lottery. A lottery is large if its arrangements are such that its proceeds may exceed £20,000. It is also large if the charity’s lottery proceeds that calendar year have already passed £250,000.

Note the words “may exceed”. The test is how the lottery is set up, not what it raised in the end.

And almost nobody mentions what happens next. Once one of your lotteries is large, every other lottery you promote for the rest of that calendar year counts as large too. So does every lottery for the following three calendar years.

One oversized draw can lock the charity out of the small lottery route for years. A large lottery is a different regime and is outside this page.

Northern Ireland: a different law, and stricter

The Gambling Act 2005 does not extend to Northern Ireland. Charity lotteries there are governed by the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985. The regulator is the Department for Communities and district councils, not the Gambling Commission. “Same rules, different regulator” is wrong.

A raffle at an event (Northern Ireland). The equivalent is article 133 of the 1985 Order, on small lotteries at exempt entertainments. It kept the two rules Great Britain dropped in 2016.

The whole proceeds of the entertainment, after certain expenses, must go to purposes other than private gain (article 133(2)(a)). And the result must be declared at the event:

“…tickets or chances in the lottery shall not be sold or issued, nor shall the result of the lottery be declared, except on the premises on which the entertainment takes place and during the progress of the entertainment.”

So in Northern Ireland the result must still be declared at the event. The lottery must also not be the only, or the only substantial, inducement to attend (article 133(2)(c)).

And there is a duty Great Britain does not have at all. The duty is in article 133(5) of the 1985 Order (Northern Ireland). You must give notice of the event to the sub-divisional commander of the police at least 7 days before it takes place.

A registered lottery (Northern Ireland). The 1985 Order has one category of societies’ lottery, registered with the district council, rather than Great Britain’s small and large split. Its ceilings are higher: £80,000 for a single lottery and £1,000,000 a year.

In a society’s lottery, no ticket may be sold for more than £100 (article 137(5) of the 1985 Order). There is no ticket-price limit for a raffle at an event under article 133. Prizes and expenses are each capped as a share of the proceeds, which leaves at least 30% for the purpose, against Great Britain’s lower share.

The Department has power to set other limits by order. No evidence was found either way that it has used that power.

Raffle checks before the event

Decide which kind of lottery you are running, and write it down.

1. Check that every ticket will be sold at the event, while it is on. If so, and you are in Great Britain, it can be an incidental lottery. If no, it needs registering as a small society lottery.
2. Check the money. Keep prize and running-cost deductions inside the two sums above. Record what every prize cost.
3. No rollover. Decide in advance what happens to an unclaimed prize. It cannot go into the next draw.
4. Record what the profit is spent on. The profit must go to the purpose the raffle was run for. Using it for anything else is an offence of its own (s.261(2), in the exposure table).
5. In Northern Ireland, add two steps. Give the police notice in time, and declare the result at the event.

Template: Lottery compliance check (planned). Tool: Is my raffle lawful? (planned).

With the kind of lottery decided and written down, the next step covers collecting money in public: run a collection lawfully.

Common mistake: selling raffle tickets in advance, or online before the event

It maximises sales and seems harmless. It is also a common breach. Schedule 11 para 7(1) of the Gambling Act 2005 (Great Britain) permits sale only, verbatim, “on the premises on which the connected event takes place, and while the connected event is taking place”. Advance sales take the lottery outside the exemption entirely.

Common mistake: calling it an “incidental non-commercial lottery”

That was its name, and most guidance still uses it.

The “non-commercial” condition was abolished in Great Britain on 6 April 2016, along with the duty to declare the result during the event. Northern Ireland kept the declaration rule. Article 133(2)(b) of the 1985 Order still requires that the result not be declared except on the premises during the entertainment. Guidance using the old name is describing law that ended a decade ago.

Common mistake: rolling an unclaimed prize into the next event

It seems generous. Schedule 11 para 6 of the Gambling Act 2005 (Great Britain) says, verbatim: “The arrangements for an incidental lottery must not include a rollover.” There is no exception.

Worked example

Wrenfield Village Hall runs a summer fete. Its committee starts selling raffle tickets weeks before the day, door to door and at the village shop. The main prize is a hamper, bought out of ticket money, and it costs more than £500.

That is two breaches. Advance sales are prohibited outright for an incidental lottery. And no more than the prescribed sum may be deducted from the proceeds for prizes. So the raffle is not an exempt lottery. The committee members who organised it have run a lottery that is neither licensed nor exempt. The offence under s.258 is committed by whoever runs it as promoter.

The Act gives a reasonable-belief defence (s.258(4)). Whether it would help anyone is a question for a solicitor.

The fix is simple, and it is made before the day. Either Wrenfield sells tickets only at the fete, while it is on, and has the hamper donated or buys a cheaper one. Or it registers a small society lottery with the local authority, which allows advance sales, and then files the return after the draw. The committee writes down which it chose, and why.