Who Runs the Lottery UK? Understanding Legal Requirements for Running Lotteries and Competitions

Dreaming of running your own lottery, raffle, or competition in the UK? Whether you want to fundraise for a charity, boost your business with a prize draw, or set up a commercial lottery, it’s easy to see the appeal. After all, lotteries and competitions can drive engagement, attract new customers, and even support a good cause.

But before you start preparing those tickets or crafting irresistible prize promotions, it’s crucial to get your legal foundations sorted. The rules around “who runs the lottery UK” are tightly regulated-and for good reason. Without the right approach, you could land in hot water with major fines or even criminal penalties.

If you want to run a lottery, raffle, or competition lawfully in the UK, keep reading. We’ll demystify who can organise lotteries, what laws you need to follow, and the key steps to protect your business or charity every step of the way.

Who Runs the Lottery UK? Understanding the Basics

If you google “who runs the lottery UK,” you’ll see two main strands: the official National Lottery, and the thousands of smaller lotteries, draws, and competitions run by private businesses, charities or community groups.

• The National Lottery is operated by a company under a government licence-currently Allwyn Entertainment Ltd, as of 2024.
• Other lotteries and prize draws may be run by businesses, charities, societies, sports clubs, and local organisations-but these are governed by strict rules (not least the Gambling Act 2005).

Essentially: any game of chance offering a prize-be it a raffle, sweepstake, prize draw, or competition-faces strict regulation in the UK. So if you’re thinking of running your own, you need to understand:

• Who is legally allowed to organise them
• What registrations, licences or permits are required
• What rules apply to advertising, running, and delivering the draw
• What key documents, contracts, and compliance checks you need in place

Let’s dig into the details, so you’re set up for success (and safety).

What Is a Lottery, Raffle, or Competition in UK Law?

Before you can figure out who runs the lottery in the UK, you need to know the difference between a lottery, a raffle, and a competition according to UK law.

• Lottery: Players pay for a chance to win a prize, and the winner(s) are determined wholly by chance. This includes most typical raffles and ticket-based prize draws.
• Raffle: A specific type of lottery, usually where players buy numbered tickets-a winner is drawn at random.
• Competition: Can be skill-based (“prize competitions,” where chance is not the sole deciding factor, such as a trivia competition), or pure chance (“free draws”), each of which faces different rules.

If your event is a lottery under UK law, there are far more restrictions than if it’s a genuine prize competition based on skill. So, the first step is to decide what you’re planning-and if you’re unsure, it’s wise to seek tailored legal advice before you launch.

What Laws Govern Lotteries and Competitions in the UK?

The key legislation governing "who runs the lottery UK" is the Gambling Act 2005. This Act sets out:

• Who can run lotteries, and under what circumstances
• Licence and registration requirements
• Rules around marketing, prize fulfilment, record keeping, and age restrictions
• Serious criminal penalties for running an unlawful lottery

In addition to the Gambling Act, several other UK laws come into play:

• Consumer Protection: The Consumer Protection from Unfair Trading Regulations 2008 covers misleading marketing and prize descriptions.
• Data Protection: The UK GDPR and Data Protection Act 2018 set rules on how you handle players’ personal information (learn more about GDPR compliance here).
• Advertising: The UK Advertising Codes (CAP and BCAP) govern how you can promote your competition or lottery.
• Local Licensing: Local authorities control registration for “small society lotteries,” such as charity raffles.

Missing a requirement-even by accident-can result in regulatory action, hefty fines, or being banned from future promotions.

You can read more about specific requirements for competitions and permits here.

Who Can Legally Run Lotteries and Prize Competitions in the UK?

The golden rule is: not just anyone can run a lottery in the UK! Here’s a quick overview:

National Lottery

The official National Lottery is a state-licensed operation, currently run by Allwyn Entertainment Ltd under strict government oversight. Private businesses or individuals cannot simply set up a rival “lottery” and sell tickets to the public.

Charities and Societies

Registered charities, societies, sports clubs and community groups are permitted to run certain lotteries-usually called “society lotteries” or “charity raffles.” These require local authority registration (for small lotteries) or Gambling Commission licensing (for larger ones). Prizes and ticket sales often have strict limits.

Businesses and Individuals

Private businesses generally cannot run a public lottery for profit unless it is a skill-based competition, a “free draw,” or a tightly regulated incidental lottery (such as a raffle at a non-commercial event). Running an unlicensed commercial lottery is illegal and carries severe penalties.

Special Types of Lotteries and Competitions

• Incidental lotteries (e.g. church fete raffles) are allowed with specific restrictions.
• Prize competitions and free draws (where skill or no purchase plays a real role) do not require a licence, but you must structure them carefully to avoid accidentally running an unlawful lottery.

If your plans don’t fit these categories, it’s best to take legal advice early to avoid mistakes.

What Licences or Registrations Do I Need?

The exact requirements depend on the type and size of the lottery, raffle or competition you’re planning. Here’s a breakdown:

• National Lottery: Not open to individuals or private businesses. Only companies awarded the National Lottery contract by the government can operate it.
• Charity and Society Lotteries:
  • Most “small society lotteries” (raffles raising under £20,000 per draw) need registration with your local authority.
  • “Large society lotteries” (raising more than this) require a Gambling Commission licence.
• Incidental Lotteries: No registration needed if run at non-commercial events. Strict limits on sale and advertising.
• Business Promotions (Prize Competitions / Free Draws): No licence if it’s truly skill-based or offers a free entry route.

You can learn more about running lawful competitions as a business in our detailed permit guide.

How Do I Run a Lottery or Prize Competition Legally?

Here’s a step-by-step roadmap to ensure you launch your lottery, raffle, or prize draw by the book:

1. Determine the Exact Nature of Your Competition

• Is it a lottery or raffle (prize given by chance, tickets sold)?
• Is it a prize competition (players must use skill/judgement)?
• Or a free draw (no purchase required)?

2. Check If You Need Registration or a Licence

• For most legitimate “small society lotteries”, apply to your local authority.
• If you plan a large or national draw, you may need a Gambling Commission licence.
• For skill-based competitions or free draws, ensure your entry method and judging process are robust-and check for legal grey areas.

3. Draft Clear Terms and Conditions

• Every competition needs written terms and conditions. These protect you and set out players’ expectations.
• Your T&Cs should explain how to enter, how the winner is chosen, eligibility rules, prize details, disputes handling and data use disclosures. For more, check our guide to competition T&Cs.

4. Comply With Consumer Protection and Data Laws

• All advertising, promotion and prize awarding must follow the rules of the Consumer Protection from Unfair Trading Regulations 2008.
• If you collect or process personal data, you’ll need a compliant Privacy Policy and data handling practices that meet UK GDPR.

5. Age and Location Restrictions

• You’re prohibited from selling lottery tickets to anyone under 16 (now 18 for the National Lottery) or outside permitted geographic regions, depending on your permit.

6. Keep Accurate Records for Auditing Purposes

• You’ll need to keep records of entries, prize distributions, and finances for your draw as required by law and your permit, making them available for inspection.

7. Get the Right Legal Advice and Documentation

• Professional legal advice is invaluable when structuring your lottery or prize competition to avoid falling foul of the law. You’ll also likely need assistance drafting watertight contracts, terms, privacy policies, and more.

Need help getting set up? Check our guide to legal issues in online competitions and marketing or have a free chat with our team.

What Legal Documents and Policies Are Needed?

Every successful-and compliant-lottery or competition needs strong paperwork. Key documents include:

• Terms and Conditions for entry and prizes (learn more here).
• Privacy Policy (if collecting entrants’ data).
• Contracts with prize suppliers or fulfilment partners.
• Advertising guidelines and documented compliance checks.
• Authority registrations or licences (plus records of ongoing compliance for regulators).

Avoid using generic templates or borrowed contracts. Tailored, specialist agreements drafted for the type of draw you’re running will keep your business or charity protected from day one. Not sure what documents you need? Explore legal documentation essentials here.

What Are the Risks If I Don’t Comply?

Running a lottery, raffle or prize draw without the right permissions-or with misleading marketing-can lead to:

• Criminal prosecution with unlimited fines and up to 51 weeks imprisonment
• Refunds for all players, prize forfeiture, or bans on future promotions
• Investigation by the Gambling Commission, local council, or trading standards
• Reputational damage (especially for charities and businesses)

It’s simply not worth taking shortcuts. Make sure you know exactly which category your draw falls into, get the required registrations, and draft contracts and terms that will stand up to inspection.

If you’re not sure where to start, our friendly UK legal team is here to guide you. A short consultation can save you costly headaches down the line.

Can Businesses Run Lotteries or Raffles to Promote a Product?

Yes-but only if they carefully structure their prize promotions as either a genuine prize competition (based on skill) or a free draw (where anyone can enter without payment). If chance alone determines the winner and people pay to enter, it’s a lottery-and strictly regulated.

Getting the format right is vital. Many “competitions” promoted online in the UK have fallen foul of lottery laws because their entry methods, judging criteria, or free routes were too limited. Penalties can be severe, and businesses may be blacklisted by payment providers or regulatory watchdogs.

For more on structuring lawful promotions and giveaways, read our Consumer Contracts Regulations guide.

Key Takeaways

• The UK National Lottery is operated under strict government licence-private businesses and individuals can’t just set up their own lottery.
• Charities, societies, and specific community groups may run registered “society lotteries,” but must comply with licensing, reporting and advertising rules.
• Businesses can only run prize draws or competitions if structured as a skill-based contest or truly free prize draw-otherwise, it counts as a lottery and faces heavy regulation.
• The Gambling Act 2005 sets the framework for “who runs the lottery UK” and other prize promotions, alongside consumer, data and advertising laws.
• You’ll need robust terms and conditions, privacy policies, and potentially contracts with suppliers-avoid templates, and always get documents drafted for your specific promotion.
• Non-compliance with UK lottery law can result in fines, prosecution, or being banned from future promotions-getting your legal protection in place from day one is essential.
• If you’re unsure whether your idea is lawful, or what licences you need, take professional advice before you launch. The right legal support can help you run a compliant-and successful-lottery or competition in the UK.

If you need help establishing, structuring, or protecting your lottery, competition or prize draw business in the UK, reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat about your plans.