A lottery can be a valuable fundraising tool for many societies. However, it is important that all societies know how to run a lottery. This helps ensure all lotteries are ran legally, as well as effectively.
Three Key Criteria
A society lottery is an ideal fundraising tool for non-commercial societies (those set up for charitable purposes or any other non-commercial purpose other than that of private gain). When running a lottery there are three criteria that must be followed:
Payment is required for entry
The majority of lotteries have a £1 to £2 entry fee; for small society lotteries it is relatively uncommon to have a higher cost to enter. Once the price is set, every ticket costs that price and there can be no be discounting or special offers – every ticket must be paid in full, so no ‘buy one get one free’ (BOGOF) offers.
Prizes are generally a lump sum of cash or goods with a monetary value, such as a car. The Weather Lottery and Sports Club lottery both have a £25,000 jackpot, the largest a small society lottery can offer under current legislation. The most common types of prizes are either a guaranteed fixed prize pool (e.g. £1000 for first prize, followed by a series of smaller prizes), or a guaranteed percentage of ticket sales (e.g. a club 50:50), or a fixed amount with equal odds of winning or not. Perhaps the most important point to remember here is that a lottery must be profit making – the prizes cannot outweigh the sales; by law, a minimum of 20% of the sales (proceeds) must be profit.
Drawing a name from a hat, random ball selection from a machine, random number generators or mathematically-proven random systems – all are valid methods for drawing a winner. Quite simply, if there is any element of skill or knowledge providing an advantage, then it is not considered a lottery.
External Lottery Managers
Due to the administration and time constraints involved in running a lottery, many societies choose to use an External Lottery Manager (ELM). An ELM will run the lottery on your behalf, helping you maximise the funds raised. You can find out more information on ELMs here.
If you would like to start your own lottery, or even looking for some advice, please feel free to get in touch using the form below and our team will be more than happy to help.