Lottery boost for charities, though smaller than anticipated

The government has announced plans to raise the annual ticket sales limit for society lotteries from £10m to £50m. This will be a welcome change for a number of charities who are nearing the current £10m limit. However, the Department for Digital, Culture, Media and Sport (DCMS) consultation on society lottery reform had recommended increasing the annual limit to £100m, and so the recent announcement is less than expected.


Other changes will include an increase in the individual per draw sales limit from £4 million to £5 million; and an increase in the individual per draw top prize limit from £400,000 to £500,000. However the 10% rule (which states that the maximum prize in any draw must be no more than 10% of the draw income) means that a draw would need to have an income of exactly £5m for the top prize of £500,000 to be offered.  In practice prize funds of this size, at least for the time being, are in the main likely to be offered only by umbrella lottery schemes such as the Health Lottery or People’s Postcode Lottery. No changes were made to small society lotteries per draw or annual sales limits.

DCMS has not rejected the prospect of a future £100m sales limit and has said that it will aim to launch a second consultation on introducing a higher tier licence, to permit a society to sell up to £100m annually, and will gather views on any additional licences conditions that may need to be introduced to facilitate this.

There is currently no fixed timeframe for the implementation of the new limits. The stated intention is for the government to introduce the necessary legislation to amend the Gambling Act 2005 in the autumn, with the changes coming into force in 2020. There may however be delays to this timetable due to Brexit. Charities that expect to have sales above the £10m limit within the next year to 18 months should therefore closely monitor the changes and prepare make other arrangements in good time before reaching the limit. These other arrangements could involve capping society lottery income to make sure it stays within the current £10m limit, or setting up a dual-licence structure.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of July 23, 2019.