Expenses & Prizes

The Minister on 16th July proposed a 100% increase in the single lottery limit, taking it to £4M. All other limits remain unchanged. The 10% rule remains, so £400K max single prize would be allowed under the new proposals.

This now has to go to consultation (three months) and must then be approved by both Houses of Parliament. The aim is to have the change in place by 1st January 2009.

Report in Third Sector Magazine on the LC response to these proposed increases in limits

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The Gambling Act 2005 allows for a general relaxation of lottery law, in particular it:

• relaxes the limits on the percentage of proceeds that may be applied to expenses or prizes;
• allows rollovers of the prize fund from one lottery to another;
• allows for the sale of tickets by an automated process; and
• removes the maximum price for a lottery ticket

Section 11 of Lotteries and the Law

Society and local authority lotteries - proceeds and other monetary limits

11.1	A society or local authority lottery must apply a minimum of 20% of the gross proceeds of each lottery directly to the purposes of the society or in the case of a local authority a purpose for which the authority has power to incur expenditure.
11.2	Up to a maximum of 80% of the gross proceeds of each lottery may be divided between prizes and the expenses of the lottery.
11.3	The maximum value of tickets that can be sold in a single large lottery is £2 million.
11.4	The maximum aggregate value of lottery tickets that can be sold in any calendar year is £10 million.
11.5	The maximum prize in a single lottery is £25,000 in the case of a small society lottery and £25,000 or 10% of the proceeds (gross ticket sales), whichever is greater, in the case of a large society or local authority lottery. Therefore, a society that sells the maximum number of tickets in a single large lottery (£2 million) could award a maximum top prize of £200,000.
11.6	Rollovers are permitted provided the maximum single prize limit is not breached.
11.7	Every ticket in the lottery must be the same price and the cost of purchased tickets must be paid to the society before entry into the draw is allowed
11.8	There is no maximum price of a lottery ticket.
11.9	No lottery may operate in such a way that a player can win a prize greater than the statutory prize limit of £200,000.
11.10	No lottery may be linked to any other lottery in such a way that a person who wins a prize in one also wins a prize in another, unless the aggregate of those prizes is less than or equal to the statutory prize limit of £200,000.
11.11	Where separate lotteries have a feature that allows a player to win a larger prize than the statutory maximum of £200,000 by selecting the same numbers in different lotteries and these lotteries are decided by the same draw, no advertisement or other marketing of the lotteries may refer to this feature.

For society and local authority lotteries promoted under licence from the Commission, accounting records must be retained for a minimum of three years from the date of any lottery to which they relate and they must be made available for inspection by the Commission on request. These records must contain, in respect of each lottery, details of the total proceeds of each lottery, the expenses of the lottery, and the number of sold and unsold tickets.