A charity raffle is a lottery, run by a non-commercial society under a licence or council registration. A prize competition is a different legal thing, decided by skill or run as a free draw. Giving some money to charity does not turn one into the other. This guide sets out the charity raffle rules in Great Britain.
Two different legal routes
Under section 14 of the Gambling Act 2005, an arrangement is a lottery if people pay to take part and prizes are allocated by chance. A raffle is a lottery. Lotteries are regulated gambling.
There are two ways to legally offer a paid chance-based prize:
- Run a lottery under the Act. For charities and clubs, that means a society lottery: a small one registered with the local council, or a large one under a Gambling Commission operating licence.
- Avoid being a lottery. Run a prize competition decided by real skill, or a free draw with a genuine free entry route. These need no licence if they follow the Act. Our guide to are online prize competitions legal in the UK covers them.
They are not interchangeable. You pick one route and follow its rules.
This is general information, not legal advice. Take advice from a solicitor before you launch.
Who can run a society lottery
Section 19 of the Gambling Act 2005 says a society is non-commercial if it is established and conducted for charitable purposes, for enabling participation in or supporting sport, athletics or a cultural activity, or for another non-commercial purpose that is not aimed at private gain.
The Gambling Commission says lotteries cannot be run for commercial or private gain. A business cannot create a "charity raffle" for its own profit. And a business running a prize competition and promising to donate some of the takings to a good cause is not running a society lottery.
If you are a charity, club or community group, you can be the promoter. If you are a business that wants to help a charity, the charity usually needs to run the lottery itself, and you may support it. Take legal advice on how.
Small society lotteries: register with the council
The Gambling Commission explains that a small society lottery needs no Commission licence, but the society must register with its local licensing authority. That is the council for the area where the society's principal office is. The fee is £40 to register and £20 a year after that, set by the Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007. Check your council for its current forms.
The main limits come from Schedule 11 to the Gambling Act 2005, and the Commission sums them up like this:
- A lottery stays small only if its proceeds are no more than £20,000, and the society's lottery proceeds in the calendar year are no more than £250,000. These limits have not changed since 2007.
- At least 20% of proceeds must go to the society's good cause.
- No single prize can be worth more than £25,000, even if donated. Up to 80% of ticket sales can cover prizes and expenses.
- All tickets must cost the same, and payment must be taken before entry into the draw.
- Tickets can be sold to people aged 16 or over, door to door, online, by phone or face to face, but not in a street, including passages in shopping centres.
- Details must go to the council within three months of the draw.
Lotteries held only at an event such as a fete or fair are treated as incidental and need no registration, if they follow the separate rules for incidental lotteries.
Large society lotteries: a Gambling Commission licence
A society lottery is large, and needs an operating licence from the Gambling Commission, if its proceeds may go above £20,000, or if the society's lottery proceeds in the calendar year go above £250,000. Under paragraph 31 of Schedule 11, once a society has run a large lottery, its later lotteries in that year and the next three calendar years are also large. A society must get its licence before it passes a limit, not after.
Large lotteries have higher ceilings. Since 7 April 2020, section 99 of the Act allows proceeds of up to £5 million per lottery and £50 million a year, with a top prize of £25,000 or 10% of the lottery's proceeds, whichever is greater. At least 20% of proceeds must still go to the society's purposes. Selling tickets online needs the right remote licence. Check the Commission's licence pages for current fees and conditions.
If a society hires an external lottery manager to run all or part of the lottery, the manager must hold an operating licence from the Commission.
How a prize competition differs
- Who runs it. A society lottery must be run by a non-commercial society. A prize competition can be run by a business.
- Where the money goes. A society lottery must put at least 20% of proceeds to its good cause. A prize competition has no such rule.
- What decides the winner. A lottery is decided by chance. A prize competition is decided by skill, judgement or knowledge, or is a free draw with a genuine free route.
- Who regulates it. Small lotteries are registered with the council and large ones are licensed by the Commission. The Commission has no remit over genuine prize competitions and free draws, though it can act if one is really a lottery.
- Prize limits. A small society lottery has a £25,000 cap on any one prize. Prize competitions have no prize cap in law, but you must still deliver the prize you advertise.
If you run a prize competition and mention charity, follow the ASA's rules on claims. The DCMS voluntary code also says operators must explain clearly how charity contributions work, publish amounts where possible, and follow the Code of Fundraising Practice. See the DCMS code explained.
Which route to choose
Choose a society lottery if you are a charity or club with a good cause, and you want a straightforward fundraising raffle within the charity raffle rules above. Choose a prize competition if you are a business that wants to sell entries with a skill question and a free entry route. Niche is built for the second case. It is not a society lottery platform, and an external lottery manager has to hold its own licence.
If you take the competition route, read the free entry route explained and skill questions for prize competitions, then see how to start a competition website. Pricing starts at £49 a month plus 5p per paid order,.
Frequently asked questions
Do I need a licence to run a charity raffle?
A small society lottery needs no Gambling Commission licence, but the society must register with its local council and stay within the limits. A large one needs a Commission operating licence. Incidental lotteries at events need neither.
How much can a small charity lottery raise?
Under Schedule 11 to the Gambling Act 2005, a small society lottery's proceeds can be no more than £20,000 per lottery and £250,000 per calendar year, and no single prize may be worth more than £25,000. Above that, the society needs a Gambling Commission licence.
Can a business run a charity raffle?
Not for its own profit. Lotteries cannot be run for commercial or private gain, and society lotteries must be promoted by a non-commercial society. A business can support a charity's lottery or run a lawful prize competition instead.
Is a prize competition that donates to charity a charity lottery?
No. Donating part of the proceeds does not turn a prize competition into a society lottery. It stays a prize competition or free draw, and the rules for those apply.
This is general information, not legal advice. Rules can change: check the Gambling Act 2005 and guidance from the Gambling Commission, or speak to a solicitor, before you launch.