Charity Lottery ‘and the Winners are for Profit’

Charities across many sectors must think they have won the lottery!  From Oxfam to the Royal Mencap Society, Fire Fighters to Sue Ryder there are a burgeoning number of number of ‘lottery schemes’ to redistribute your wealth. The Gambling Commission records 520 licensed lotteries that range from big bookies to bigger charities.

The  for Profit Sector

Google ads for these schemes rake in money for guess who? You got it, Google! TV ads are becoming more frequent for example back to back ITV 3 adverts for the  Cats Protection lottery and the RNIB must have cost a few months prize money. ‘Your Charity Lottery’  works in conjunction with Dove House Hospice Ltd   509551 – and says it offers other charities and fundraising groups the opportunity to add a weekly draw to their fundraising portfolio’.

Set up and management costs for these schemes must have been calculated to be cheaper than other fund raising activities, or more likely it is just one more money raising method. Private commpaies have latched on to the opportunity for their business eg. ‘ Zaffo can manage lotteries, raffles, prize draws, free prize draws, instant win games’…….. ‘ Woods is already leading the market. We act as an external Lottery manager, providing clients with a comprehensive charity lottery service ……….’  ‘Clubdraw is designed to give good causes large and small – from village playground fund to international club – the chance to gain support and raise valuable funds through their own weekly lottery draw ………’ Other similar organisations are available.

The Gambling Commission

A lottery is a kind of gambling which has three essential ingredients:
■You have to pay to enter the game
■There is always at least one prize
■Prizes are awarded purely on chance

Types of lottery under the Gambling Act 2005 are classified as

Small society lotteries The society in question must be set up for non-commercial purposes eg sports, cultural or charitable. There is a top limit of £20,000 in ticket sales.

Large society lotteries Similar to the small society lottery, but there is a minimum of £20,000 in ticket sales and more onerous controls.

Local authority lotteries to help with any expenditure it normally incurs. They must hold a Gambling Commission licence.

The following types of lottery do not require permission.

  • Private society lotteries must raise money for the purposes for which the society is conducted or to raise funds to support a charity or good cause. No rollovers.
  • Work lotteries for colleagues who work at the same single set of premises/people who live on the same single set of premises. No rollovers. make no profit or be to raise funds for a charity or good cause.
  • Customer lotteries can only be run by a business, at its own premises and for its own customers. No prize can be more than £50 in value. This type of lottery cannot make a profit, and so is unsuitable for fundraising. No rollovers.
  • Incidental lotteries  can be held at commercial events (such as exhibitions) or non-commercial events (such as school fetes) and must be for charitable or other good causes. They cannot be run for private or commercial gain.

Concerns

  • Is enough of the donor/player cash returned to the good or charitable cause.
  • Both the Gambling and Charity commissions have supervision roles and need to be coordinated to prevent abuse.
  • Gambling is a potential problem for those less able to manage their finances. Our local Credit Union (set up to to help borrowers) is happy to promote its regular lottery and annual raffle.

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