Your Raffle Could Be Illegal According To The UKGC

In the United Kingdom, the UK Gambling Commission (UKGC) classifies raffles as lotteries, or gambling games. It all depends on how the lottery is arranged, and what happens to the money. Some lotteries can operate without a Gambling Commission licence; others need a licence.

It pays to know the rules, but get them wrong, and you will be running an illegal lottery. This means an enforcement fine or even imprisonment. Find out more below.

The Most Important Rule is: No Personal or Commercial Gain

This is the rule that catches many raffle organisers. Under UK gambling law, lotteries can only be run to raise money for good causes or for fun. They cannot be run for private or commercial gain.

Imagine someone owns an expensive designer handbag. They decide to sell 1,000 £10 raffle tickets online, with the bag being the prize. The bag holder keeps whatever money remains after covering their costs. The UKGC does not consider this a harmless private raffle.

A lottery is generally defined by three basic elements:

People pay to enter the lottery.
They hope they will win a prize.
The winner is determined wholly by chance.

Legal structures exist for commercial promotions to follow. People can’t simply call a commercial lottery a “raffle” and assume the law does not apply. The following are the 6 categories that don’t need an official licence.

The Six Categories that don’t Require a Lottery Licence

UK law allows certain types of lotteries to be run without a UKGC licence. These are the six licence-free categories, each with their own restrictions.

Small Society Lotteries

Small society lotteries are designed for non-commercial societies. These include charities, sports clubs and communities. No UKGC licence is required. However, the society must register the lottery with its local licensing authority.

There are also financial limits. A society cannot sell more than £20,000 worth of tickets in a single lottery or more than £250,000 worth in a calendar year. At least 20% of the proceeds must be applied. A single prize can currently be worth up to £25,000. Example: the local football club holding a lottery to raise funds for equipment.

Incidental Lotteries at Events

An incidental lottery is essentially a raffle held as part of another event. The lottery must be incidental to the event and not the reason the event exists. Examples of Incidental Lotteries include charity dinners, school fetes, and festivals.

You may deduct up to £100 from the proceeds for lottery expenses. For prizes, the total that can be deducted is £500. Tickets can only be sold on-site and during the event itself, and the results must be announced during the event.

Customer Lotteries

Customer lotteries are available to businesses, but the rules are particularly restrictive. The lottery must take place at a single physical business premises. Tickets can only be sold physically to customers aged 16 or over on the premises. Tickets cannot be sold online.

There can be no profit and the lottery cannot be used for fundraising. Physical prizes must be worth less than £50, although a business can offer a service as a prize. For example, the hairdresser running a client draw for a free hair treatment. The draw cannot then be promoted on Facebook and opened to anyone who wants to buy a ticket. That distinction is crucial.

Work Lotteries

A work lottery is another familiar example. An example of this is an office Grand National sweepstake. The rule is that the organiser and participants must work at or from the same physical premises. No profit may be made from the lottery. A work lottery can raise money for a good cause, or it can be run for fun among colleagues.

Residents’ Lotteries

Residents’ lotteries are for people who live together at the same physical location. This could be residents of the same apartment block or care homes, or even a single street or specific residential complex. Everyone taking part must live at that same location. No profit can be made, and the proceeds can be used for reasonable expenses and prizes to benefit the residents or their shared community.

Private Society Lotteries

Private society lotteries are designed for genuine societies. These include sports clubs and community groups. Members can participate. Non-members may also be able to buy tickets if they are physically on the society’s premises. The tickets must be physical. Ticket rights cannot be transferred, and the draw must take place on the physical premises.

Private society lotteries can be used to raise money for the society itself. The monies must be spent on something relevant to the company. For example, a tennis club could run a lottery to help pay for new equipment.

The Online Trap and Commercial Competition Alternatives

This one is for anyone thinking of running a raffle through Facebook, Instagram, or a website. Selling paid raffle tickets to the public online does not fit the licence. Small society lotteries are different. A registered small society lottery can sell tickets online as a non-commercial society.

So how do commercial “win a house” or “win a car” promotions exist? They are often structured not as lotteries, but as free draws or prize competitions. A free draw can have a paid entry route, but it must also provide a genuine free route. That route must be clearly promoted. Traditional first- or second-class post is one example of a free entry route.

Ensuring Your Lottery Stays Legal

The biggest lesson is simple. Never assume that a raffle is legal just because it is small, informal or online. Before selling tickets, establish what type of lottery you are actually running. Is it a small society lottery or an event raffle? A work or residents’ lottery, or a private society lottery?

Each category has its own conditions. Failing to meet them can take the activity outside the exemption. Most importantly, remember that lotteries cannot be operated for private or commercial gain.

If you are thinking about raffling your house, simply calling it a “raffle” does not make it lawful. If people are paying to enter and the winner is selected by chance, the activity could be classed as a lottery.

The Gambling Commission’s guidance should always be your starting point. The Commission advises seeking independent legal advice rather than simply assuming. A few minutes spent checking the rules could prevent a much bigger problem later.

Under UK gambling law, whether a fundraiser is an illegal lottery depends on several details. Who is allowed to enter, where tickets are sold, and how much is charged. Where the money goes is also important, and whether the winner is selected entirely by chance.

Before you print those tickets, or post your raffle on social media, check the rules first. What looks like some harmless fun can have serious legal consequences. If it falls outside the permitted categories, it’s classified as gambling. The rules protect everyone taking part and help keep the raffle fun and legal.