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Home > News > Fundraising with Raffles, Races, and Casinos: Are You Breaking the Law?

Fundraising with Raffles, Races, and Casinos: Are You Breaking the Law?

27 July 2017 |

Everyone likes a good cause such as a charity or a local sports club – or even running an office sweepstake – but you should be aware that there are some legal restrictions.

A raffle is a form of lottery which, unless the gambling laws say otherwise, is illegal. Most involve paying for the chance of winning a prize where no skill is involved in the chance of winning e.g. buying a raffle ticket and someone draws the tickets out of a hat. There are other examples such as sweepstakes and race nights.

The two most common types where permission is not required are as follows:

(1)    School raffles

These are a good way of persuading parents to part with their cash for the chance of winning prizes – often cakes and biscuits or donated bottles of wine. In order to be legally covered:

(a)    There has to be an “event” such as the annual school fete or sports day, where the tickets are being sold as something incidental to the event itself

(b)    Tickets may only be sold on the day of the event itself, and should not be sold in advance although the draw may take place later

(c)     The proceeds must be applied for some charitable or good cause, and only £100 may be deducted for any expenses in promoting the raffle, and no more than £500 spent on prizes, although few expenses arise from school events directly related to the raffle itself.

The guidelines above also apply to raffles at other events e.g. a sporting dinner where raffle tickets will be bought during the course of the event, and winners announced at the end of the event.

(2)    Work or Residents Lotteries

A raffle or sweepstake may take place at your work place or place of residence, providing that it takes place at one single premises only. There can be no advertising away from the premises, and you will be entitled to deduct the costs of any prize and any reasonable expenses.

Race nights

A race night can be offered in similar circumstances to the raffles above: incidental to the event itself, and with similar restrictions applying with regard to the distribution of any proceeds and expenses.

However, it is important to avoid the pitfall of offering odds, or in fact any information of form, as any prize must depend on pure chance. For this reason, it is usual to use archive film of races which have already taken place, without any information as to the details of the race.

In limited situations, a stake can be made but each participant must have an equal chance of winning. You should take legal advice before going ahead with such events as a licence, or the presence of a licensed bookmaker, might be required.

Casino or poker nights

In certain limited situations, these are also permitted without the need for a permission e.g. where there are no stakes or prizes apart from the satisfaction of winning, but otherwise rules apply to each type of event.

For example, with casino nights the players must be informed of the good cause which will benefit from the game and prizes must be advertised in advance. Similar restrictions apply to poker nights. There are strict limitations on stakes and it is urged that advice is taken before proceeding with such an event.

 The guidelines above only apply to draws which are viewed as a lottery. They do not apply where, for example, there is some exercise of skill which is normally regarded as a competition. The rules here are quite complex but an event such a quiz night where the winners, and possibly, runners up would be entitled to prizes, would be quite lawful and no permission is needed.

Confused? It’s always better to be certain than hopefully that you are operating on the right side of the law, so get in touch with our expert Mike Parrott, Director of Licensing & Regulatory.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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