Why Gamble?

Commercial solicitor Andrew Carrier describes a real case study based on his own experience relating to gambling and specifically to lotteries.

The office sweepstake idea I had come up with was illegal; who knew! My initial reaction was: who cares nobody gets hurt? But then I thought that my position as a solicitor, and the firm’s credibility, required me to investigate a bit more. Gambling is covered mainly by the Gambling Act 2005 and it regulates gambling in order to prevent crime and disorder, to protect children and vulnerable people and to ensure that gambling is conducted in a fair way. There are criminal sanctions for breaking gambling law.

A lottery is a form of gambling – and, as in my case, an office sweepstake is a form of lottery. To hold a lottery you must be licenced or hold an appropriate registration unless you fall within one of the permitted types of lottery.

The characteristics of a lottery are:

– participants pay;
– there are prizes; and
– prizes are won by chance.

Three types of lottery don’t need a licence or registration:

– incidental / non-commercial lottery – such as a lottery held at a charity dinner;
– a private lottery – held by a society, in a work place or in a residence; or
– a customer lottery – held on business premises.

The Gambling Commission has some helpful information that goes into more detail about this subject but a few things of interest are worth mentioning here as they explain how my own sweepstake idea has developed.

The incidental lottery

This type of lottery could take place at an event like a dinner dance or a school fete. Some key features:

– proceeds must not be for private gain (although a third party can make a profit at the event e.g. from a bar)
– the lottery promoter cannot take more than £100 in expenses from the proceeds
– prize money must not exceed £500
– tickets must be sold at the event
– rollover is not permitted

The private lottery

This type of lottery is strictly limited to the private group holding it and cannot be advertised outside the group (the group being the members of a private society or persons in a workplace or a residence). Some other key features:

– a workplace can only be one building so a firm like ours with four offices cannot hold a lottery under this heading
– the lottery must not be run for profit and all proceeds (other than incidental expenses) have to be returned as prize money
– tickets cannot be transferrable
– rollover is not permitted.

In my case I wanted to hold a sweepstake in order to raise money for charity. I called the Gambling Commission and they confirmed that we could not hold a workplace lottery to raise money for charity (the usual sweepstake on the Grand National is fine because the proceeds are all returned as prize money). The person I spoke to wouldn’t expand (the Gambling Commission cannot give legal advice) but suggested that I consider an incidental lottery linked to an event. And that is what I have now designed having learned something new along the way!

By Andrew Carrier from the King’s Lynn office