Available for use in AGC or bingo premises under the 20% regulations

 Licensees are only entitled to count the number of machines that can be played simultaneously by different players without physical hindrance.

##  Example


 A multi-position machine could not be classed as two or more machines if two or more players playing at the same time were required to stand closely together and therefore discouraged the second player from using the machine.  In relation to tablets, licensees should ensure that there is sufficient floorspace in the premises to permit counted tablets to be used simultaneously.

 Read more information on when a machine is  [available for use' in AGC or bingo premises under the 20% regulations](/licensees-and-businesses/page/when-gaming-machines-are-available-to-use-20-regulations)


Machines providing more than one category

A machine that can operate at more than one category, which is operating at a lower category, does not contribute to the number of machines ‘available for use’ at a higher category until it switches to that category. Licensees must ensure no more than the permitted number are ‘available for use’ at any one time.


Systems in which a number of machines are networked so that the player can select which game and category they play are permitted but licensees must still adhere to any restrictions on the number of machines at a certain category.


 EBTs that offer gaming machine content in addition to bingo content are gaming machines. They are subject to adherence with the principles around AGC or bingo premises under the 20% regulations.

 An EBT must only allow participation in one gambling activity at a time and should not therefore contain functionality which allows participation in bingo and gaming machine activity simultaneously.


* [When a machine is available for use](#)
* [Available for use in AGC or bingo premises under the 20% regulations](#when-is-a-machine-available-for-use-in-agc-or-bingo-premises-under-the-20)
* [Machines providing more than one category](#what-about-machines-providing-more-than-one-category)
* [Machines that are networked](#what-about-machines-that-are-networked)
* [Electronic Bingo Terminals (EBTs)](#what-about-electronic-bingo-terminals-ebts)

 [Print this guide](#)


Non-complex cat D gaming machines (crane grabs)

 Certain types of machine currently operating as  [skill with prize](/licensees-and-businesses/guide/skill-with-prizes-swps)  , with a maximum stake of £1 and a maximum prize of £50 (non-monetary) should be labelled as  [category D](/licensees-and-businesses/guide/page/d-gaming-machines)  non-complex crane grab machines.

##  Classification of crane machines

##  Machine technical standards

##  Limited prize machines

##  Skill with prize machines (SWPs)

##  Files


 As these are gaming machines, a premises licence or permit from the local authority is needed to site them. Depending on the type of premises, some unlicensed operators will also need to apply for an operating licence.

 Although the majority of this type of machine are operated as cranes within adult gaming and family entertainment centres under the category D stake and prize limits, there has been a trend where they are being offered to the public. When offered to the public, they are presented as a skill machine as opposed to a gaming machine, without the necessary permissions to do so. This occurs in pubs, shopping centres, motorway service areas and other similar venues.

 Machines which are capable of being used as a gaming machine, whether or not they are currently operating as a gaming machine, are classified as a gaming machine. For example, a machine fitted with a compensator, which allows it to be converted from a skill machine to a gaming machine, is classified as a gaming machine.

 You can see a more detailed definition of gaming machines in  [section 235 of the Gambling Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/235)

 Machines using a mechanical arm or similar device to select a prize and which employ a compensator unit to determine the percentage pay-out of the machine, need to be clearly marked as a gaming machine (skill and chance combined). They also may only be operated in premises where the necessary permissions are in place.

 Operators supplying or maintaining these types of machine must have an operator’s licence. Check the  [public register](/public-register)  for those who hold or have applied for an operators’ licence.

 !  **Warning  Where the relevant permission has not been granted the machine should be removed from the site immediately.**


 Where a machine determines whether a player has an opportunity to win a prize partly by chance (using a compensator or control system to control the payout) but also by a player using a degree of skill to ultimately win the prize, the machine would be considered a game of chance and skill combined.

 This is defined by  [section 6(2)(a) of the Gambling Act 2005 (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/6)  as a game of chance and will therefore be defined as a gaming machine.

 We will consider amending the definition of category D non-complex crane machines in our Technical Standards to replicate the definition of crane in  [The Categories of Gaming Machine (Amendment) Regulations 2009 (No 1502) (opens in a new tab)]( https://www.legislation.gov.uk/uksi/2009/1502/contents/made)  .

 A crane grab machine is a reference to a non-money prize machine in respect of which:

* every prize which can be won as a result of using the machine consists of an individual physical object (such as a stuffed toy)
* whether or not a person using the machine wins a prize is determined by the person’s success or failure in manipulating a device forming part of the machine so as to separate, and keep separate, one or more physical objects from a group of such objects.

 In general, the only requirement needed to make existing crane grab machines compliant with this regulation and our technical standards would be to include a display notice on the machine stating that it is a category D gaming machine with the proviso that the stake or prize does not exceed the statutory limits of £1-£50 respectively and that prizes are totally non-monetary.

 Suppliers/operators will be aware that other requirements such as Gamcare information (or equivalent) must also be met.

>  Should the industry attempt to exploit the situation in a manner deemed undesirable or outside the spirit of that intended then we may review our position in this matter.
>
>


 Limited prize machines have been around for many years and the most recent type seems to be the ‘play until you win’ or ‘prize every time’ crane machine, although there may be other types.

 [Section 249 of the Gambling Act 2005 (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/249)  states that a person does not commit an offence under section 37 or 242 (of the Gambling Act 2005) if they make a gaming machine available for use by an individual; and the individual does not, by using the machine, acquire an opportunity to win a prize of a value in excess of the amount paid for or in connection with use of the machine.

 The explanatory notes to the Gambling Act elaborate on this a little and say a ‘limited prize’ is “a prize whose value does not exceed any payment made for use of the machine”. That is, the prize value does not exceed the cost to play.

 This exemption means that a licence or permit is not required to cover the siting of a limited prize machine.


 There are no statutory limits in place regulating stakes and prizes for SWPs, however, the Commission and HMRC are of the view that it is unlikely that a maximum prize greater than £50 would be commercially viable in a genuine skill game.

 A voluntary limit had previously been agreed between machine manufacturers and trade bodies, limiting the price of one game to £1 and the maximum prize to £50 (wholesale value).

 See the  [quick guide on SWPs (PDF)](//assets.ctfassets.net/j16ev64qyf6l/3PKYyjzZD0Y6YAuAN9kfN1/c1c84857750d6d8f6e2b49814a4f7f33/skill-with-prize-machines-a-quick-guide-for-licensing-officers.pdf)  for more information.


 Some files may not be accessible for users of assistive technology. If you require a copy of the file in an accessible format  [contact us](/forms/formatrequest)  with details of what you require. It would help us to know what technology you use and the required format.

 **PDF Files**  Some PDF files cannot be displayed in a browser, you will see a message saying 'Please wait...'. If you see this message, you will need to download the file and open it in  [Adobe Acrobat Reader (opens in a new tab)](https://get.adobe.com/reader/)  .

 [Examples-of-crane-type-machines

 application/pdf PDF 1.9 MB](//assets.ctfassets.net/j16ev64qyf6l/4tVHSKGmjc6XTN9hfBsshS/c2edb423a2110038c746769af6f4f5a0/Examples-of-crane-type-machines.pdf)

---

 Last updated: 11 June 2021

 Show updates to this content  No changes to show.


* [Non-complex cat D gaming machines (crane grabs)](#)
* [Classification of crane machines](#classification-of-crane-machines)
* [Machine technical standards](#machine-technical-standards)
* [Limited prize machines](#limited-prize-machines)
* [Skill with prize machines (SWPs)](#skill-with-prize-machines)

 [Print this guide](#)


To achieve fairness for consumers some gambling products must be tested by an approved Test House before they are released to the market.


>  [Licence condition 2.3.1](/licensees-and-businesses/lccp/condition/2-3-1-technical-standards)  - Licensees must follow the Commission's technical standards and with requirements set by the Commission relating to the timing and procedures for testing.
>
>

 Test houses are approved to test compliance against our requirements and the technical standards, including:

* [gaming machines technical standards](/licensees-and-businesses/page/gaming-machine-technical-standards)
* [remote gambling and software technical standards](/standards/remote-gambling-and-software-technical-standards)
* [bingo and casino technical standards](/standards/bingo-and-casino-technical-requirements)  .

 All test houses must have full accreditation to  [BS/ENISO 17025 standards (opens in a new tab)](https://shop.bsigroup.com/ProductDetail?pid=000000000030379555)  and play a vital role in ensuring games are fair to consumers.


 Test houses approved by the Gambling Commission as of 1 October 2020.

 Test houses and details |  Test House (Trading Name)  |  Website address  |  Remote Technical Standards  |  Categories of gaming machines  |  Requirements for bingo and casino equipment  |
| --- | --- | --- | --- | --- |
|  BMM Testlabs (South Africa)  |  [www.bmm.com](https://www.bmm.com/ "BMM Testlabs South Africa")  |  Yes  |  All categories (except cat B3a and compensated versions)  |  No  |
|  BMM Spain Testlabs SL  |  [www.bmm.com](https://www.bmm.com/ "BMM Testlabs South Africa")  |  Yes  |  All categories  |  Yes  |
|  eCOGRA Limited  |  [www.ecogra.org](https://www.ecogra.org/ "eCogra")  |  Yes  |  None  |  No  |
|  Gaming Associates Europe Ltd  |  [www.gamingassociates.eu](https://www.gamingassociates.eu/)  |  Yes  |  None  |  No  |
|  Gaming Laboratories International, LLC  GLI Europe BV  GLI Austria GmbH  GLI Africa (Pty) Limited  GLI UK Gaming Limited  |  [www.gaminglabs.com](https://www.gaminglabs.com)  |  Yes  |  All categories  |  Yes  |
|  Global Lab Limited  |  [www.@global-lab.eu](https://global-lab.eu/ "Global Lab Limited")  |  Yes  |  None  |  No  |
|  iTech Global Pty Limited (iTech Labs)  |  [www.itechlabs.com](https://www.itechlabs.com/ "iTech Labs")  |  Yes  |  None  |  No  |
|  Quinel Ltd  |  [www.quinel.com.mt](https://www.quinel.com.mt/ "Quinel M. Ltd")  |  Yes  |  None  |  No  |
|  Trisigma B.V.  |  [www.trisigma.nl](https://www.trisigma.nl/ "Trisigma B.V.")  |  Yes  |  All categories  |  Yes  |
|  Trisigma Spain SLU  |  [www.trisigma.com](https://www.trisigma.com "Trisigma Spain SLU")  |  Yes  |  None  |  No  |


Test House applications and changes to approvals

Any new Test House seeking approval from us, or a currently approved Test House wanting to make changes to their approval, should email  [testhousesubmission@gamblingcommission.gov.uk](mailto:testhousesubmission@gamblingcommission.gov.uk)  requesting an application form and guidance notes.


 Approved Test Houses are required to report to us any incident or change that could have a significant impact on the delivery or structure of their business and/or ability to deliver and/or uphold the testing framework. They must also report to us annually on their activities.

 Guidance on  [Test House information reporting](/licensees-and-businesses/guide/test-house-information-reporting)  for you to view.

---

 Last updated: 16 February 2023

 Show updates to this content  Trisigma Spain SLU added to the list - 13/12/2021 Additional information on applications and changes to approvals and information reporting added - 27/01/2022

 Slovenian Institute of Quality and Metrology t/a SIQ Ljubljana removed from the list - 16/02/2023


Technical standards: security requirements

 Our testing strategy requires a third party annual security audit against particular sections of ISO/IEC 27001:2013.

>  You must ensure that the security audit report provided by the security auditor meets our advice.  [Read our security audit advice](/licensees-and-businesses/guide/security-audit-advice)  .
>
>

 A copy of the audit report must be submitted to the Gambling Commission by the licensee annually, within  **7 days**  , if requested by the Commission or if any major non-conformities were identified.


 Reports containing major non-conformities should be submitted to:

 [securityaudit@gamblingcommission.gov.uk](mailto:securityaudit@gamblingcommission.gov.uk)

 Requested reports should be submitted according to the process set out in the request.


 See  [section 4 - Remote gambling and software technical standards (RTS) security requirements](/standards/remote-gambling-and-software-technical-standards/4-remote-gambling-and-software-technical-standards-rts-security-requirements)  .

 You can obtain a full copy of ISO/IEC 27001:2013 from  [BSI Customer Services (opens in new tab)](https://www.bsigroup.com/en-GB/contact-us/)  .

 The security requirements detail information security standards with the aim of ensuring that you have appropriate controls in place so that customers are not exposed to unnecessary risks when choosing to participate in remote gambling.

 The requirements apply to:

* electronic systems that record, store, process, share, transmit or retrieve sensitive customer information, for example credit/debit card details, authentication information, customer account balances
* electronic systems that generate, transmit, or process random numbers used to determine the outcome of games or virtual events
* electronic systems that store results or the current state of a customer’s gamble
* points of entry to and exit from the above systems (other systems that are able to communicate directly with core critical systems)
* communication networks that transmit sensitive customer information.

 Breaches of information security may constitute a  [key event](/licensees-and-businesses/guide/key-events-for-operators)  which you must report to us. We have produced guidance to help you in determining  [when to report security breaches](/licensees-and-businesses/guide/notification-of-information-security-breaches)  and what information to include in the report.

 Whilst we do not require operators to become fully certified with the ISO 27001:2013 standard many have chosen to. For these operators we allow them to supply existing information, rather than having to duplicate effort.

 Existing information would include:

* accreditation certificate - ensuring that the entities and business functions covered by the accreditation are clearly defined
* Statement of Applicability (SOA) - ensuring it covers all RTS security elements
* copy of last audit report - including management response and an action plan for any findings
* a forward schedule of future audit focus - or some other way of demonstrating that all RTS security elements will be reviewed at least every three years.

---

 Last updated: 11 November 2022

 Show updates to this content  Fololowing an audit the 'key event' and 'when to report security breaches' links have been updated.


 This advice is updated from the previous version published in July 2015. ##  Who this advice is for

 [Table 1 of the Testing strategy for compliance with the remote gambling and software technical standards](/strategy/testing-strategy-for-compliance-with-remote-gambling-and-software-technical/2-procedure-for-testing#table-1-general-risk-and-compliance-assurance-activities)  (Testing strategy) sets out that an annual security audit must be carried out by an independent auditor to assess compliance against the security requirements of the Remote gambling and software technical standards (RTS).

 This requirement applies to licensees holding the following types of licence:

* remote betting – general (but not telephone only or trading rooms)
* pool and intermediary
* remote casino
* remote bingo
* remote external lottery managers and society lotteries (sales greater than £250,000 per year) licences.

 A copy of the audit report must be submitted to the Gambling Commission (the Commission) by the licensee annually within  **7 days**  if requested by the Commission or if any major non-conformities were identified.

##  Submitting reports


This advice is for holders of all remote gambling operator licences, including specified remote lottery licences.


 Reports containing major non-conformities should be submitted to:

 [securityaudit@gamblingcommission.gov.uk](mailto:securityaudit@gamblingcommission.gov.uk)

 Requested reports should be submitted according to the process set out in the request.

##  Security audit report content

##  Security auditor experience

##  The scope of testing

##  The audit approach

##  Audit coverage for aspects provided by third parties

##  Persons interviewed

##  Documents reviewed and evidence measures

##  Sample of an audit report

##  Definitions

##  Example of security audit and management responses to issues that were identified

##  Assessment

---

 Last updated: 8 February 2021

 Show updates to this content  No changes to show.


 In summary a ‘good’ standard security audit report must include the following:

* the operator’s name
* the auditor’s name and background
* the date(s) of the audit
* brief background of the operator, its business model and gambling activities offered or third parties used
* locations visited by the auditor
* the standard against which the audit was conducted, i.e. BS ISO/IEC 27001:2013
* an executive summary - the executive summary must include a high level overview of the work undertaken and the control environment operating. It should also include any key issues or findings
* aside from the report detailing the assessment results for each of the RTS security elements, an auditor's opinion about whether the licensee’s overall security control environment is effective for the areas outlined in the RTS must be documented
* the scope of testing including the Information Technology systems that were reviewed
* the audit approach - enquiry based questions, observation, evidence, key persons interviewed (this helps to identify if the appropriate persons were involved in the security audit)
* evidence obtained during the audit to substantiate audit results. This would include the documents that were reviewed, including version and dates, staff interviewed, details of the walkthroughs performed, samples reviewed to verify compliance etc.
* the results of audit (sections that are fully compliant, observation, minor non- conformity and major non-conformity)
* management plan to resolve issues that were identified
* other relevant factors.

 Other relevant factors include such as whether the operator or systems are compliant or have been audited against other requirements. For example, Payment Card Industry Data Security Standards (PCIDSS).


 The Commission will require as part of the security audit the auditor’s name and background. There must be sufficient information supplied to satisfy us that the auditor is both independent and suitably qualified.

 This should include:

* the name of the audit firm and how they are suitably qualified to test compliance with BS ISO/IEC 27001:2013 (ISO 27001)
* who completed the audit, their experience and qualifications. The following certifications may demonstrate suitability to complete the audit:
* ISO 27001 Lead Auditor
* Certified Information Systems Auditor (CISA)
* Certified Information Security Manager (CISM)
* Certified Information Systems Security Professional (CISSP)
* that they are independent of the licence holder.

 A suitable auditor is likely to have completed external security audits of other organisations.


 The audit must cover  [section 7 of the Testing strategy](/strategy/testing-strategy-for-compliance-with-remote-gambling-and-software-technical/7-third-party-annual-security-audit)  that states the following.

 **Section 7:**

 The Commission has highlighted those systems that are most critical to achieving the Commission’s aims and the security standards that will apply to these critical systems:

* electronic systems that record, store, process, share, transmit or retrieve sensitive customer information, for example, credit or debit card details, authentication information, customer account balances
* electronic systems that generate, transmit, or process random numbers used to determine the outcome of games or virtual events
* electronic systems that store results or the current state of a customer’s gambling history
* points of entry to and exit from the above systems (other systems that are able to communicate directly with core critical systems)
* communication networks that transmit sensitive customer information.
 The Commission requires the auditor to detail how the critical systems were identified and if the audit included the following areas:

* applications (gambling systems)
* network - for example, Windows
* database - for example, Oracle
* operating system - for example, Linux.

 The scope of the audit must cover all of the RTS security elements. We recognise however that it is common audit practice to use a risk based approach and where an area has adequate previous recent external audit work or is of low risk then it may not be necessary to re-perform audit work in that area every year. For example, if a separate external audit or review of backup capability was tested in an organisation six months prior and was found to be compliant then the audit need not review that again so soon providing the auditor can review and rely on the previously conducted work.

 Where any aspect was not reviewed as part of this audit the report must detail why and include references to any relevant previous external audit that the auditor relied upon. Such previous audit can only be relied on if it was performed to ISO/IEC 27001 (or equivalent) standard.


 The Commission must understand how the audit was conducted. It does not consider that a good audit can be conducted remotely based only on documentation.

 It should include  **all three**  of the following methods:

1. asking questions (enquiry based approach)
2. gathering evidence (evidence based approach)
3. being on-site and speaking to staff (observation based approach).

 An information security audit uses a range of assessment methods including gathering evidence, reviews of procedures, and access to offices and staff including non-technical staff.

 For example:

* HR for training records - 'RTS Annex A Security Requirement A.7.2.2 Information security awareness, education and training',
* various managers to ensure by interview and evidence gathering that regular user access reviews are taking place - 'RTS Annex A Security Requirement A.9.2.5 Review of user access rights'
* verifying screen locks occur on workstations after x minutes etc.

 If the operator has satellite operations in a number of locations around the world then the Commission would require the operator and auditor to determine during planning which locations are most critical to visit in order to assess the information security aspects for the Commission licensed activity.

 Where it may not be appropriate to visit multiple locations, in certain areas remote based telephone calls and emails to gather information would suffice. A fully informed professional judgement would have to be made to ensure a suitably robust audit took place. Conducting an audit fully via remote means just by talking to staff and reviewing information by email would not be sufficient.


Audit coverage for aspects provided by third parties

 Operators must satisfy themselves of the information security adequacy in place with the third parties they use.  [Social responsibility code provision 1.1.2](/licensees-and-businesses/lccp/condition/1-1-2-responsibility-for-third-parties-all-licences)  outlines licensees’ responsibility for third parties. In addition to this code there are requirements that would be within the audit scope, specifically dealing with the management of third parties, namely the ISO/IEC 27001:2013 extract within the  [RTS: Standard – 15 Supplier Relationships](/standards/remote-gambling-and-software-technical-standards/4-remote-gambling-and-software-technical-standards-rts-security-requirements#standard--a15-supplier-relationships)  .

 The auditor, as part of planning for the audit and in conjunction with the operator, must establish if there are third parties and whether they should form part of the audit scope.

 Important factors to consider here would include the functions the third party performs and whether they have access to information or systems critical to the licensees’ gambling provision. In some instances the auditor may be able to rely on other audit work conducted over the third party, providing the auditor is content with the adequacy and scope of that work.

 A common example might be a third party data centre that hosts gambling servers. The auditor may rely on the fact that the data centre is ISO27001 certified or has been previously reviewed for the main area of their RTS responsibility, namely the physical security aspect.

 Another example would be the use of B2Bs for part of the gambling provision. For example, managed online slots or a poker network. In this case, it is likely that the B2B is licensed as a remote gambling operator themselves and would therefore be subject to their own security audit. This fact alone does not absolve the B2C of their own responsibility in this area and we would expect the B2C to obtain assurance from the licensed B2B as outlined previously. For example, contractual terms, service level agreements and assurance statements such as ISAE 3402 Statements.


 The audit report is to include the name and title of the people that were interviewed.

 The Commission would expect the key stakeholders responsible for establishing the information security framework, and applying it to be interviewed, such as:

* person with overall responsibility for remote gambling
* compliance officer
* information security officer
* operational staff (sample of)
* software developers.


Documents reviewed and evidence measures

 The audit report must include the policies, procedures and documents reviewed.

 An example of some of the policies, procedures and documents that we would expect to be reviewed includes:

* IT security policy
* user access
* development and testing procedures
* service level agreement
* policy on use of network services
* detection, prevention, and recovery controls to protect against malicious code
* data backup policy
* procedures in place so that media is disposed of securely and safely
* procedures for the handling and storage of information (to protect the information from unauthorised disclosure or misuse)
* change management policy
* procedures for monitoring use of information processing facilities
* a policy, operational plans and procedures for teleworking activities
* policy on the use of cryptographic controls
* network diagram.

 The operator may list different document names but this still must contain the applicable policy/procedure. The Commission may ask an operator for more information about this if it is unclear in the report.

 The audit areas from which evidence is gathered includes:

* applicable security settings in place (including network, database, operating systems and gambling applications)
* user access controls (both staff and player access)
* software changes
* reviews of any externally conducted penetration testing and vulnerability assessments performed
* physical access
* audit log reviews
* information processing controls
* backup recording
* staff interviews and walkthroughs with evidence noted for selected processes
* training records.


The Commission would expect to receive an audit report using a standardised methodology of completing security audits. The following are some of the acceptable terms the Commission would expect to see in a security audit and an example of the layout of the report.


 This example report uses the following definitions for the compliance assessments of each area evaluated.

###  Compliant

 The policy and evidence viewed was considered to be fully compliant with the BS ISO/IEC 27001:2013 guidelines.

###  Observation

 A policy is in place but it is either not fully compliant with the BS ISO/IEC 27001:2013 guidelines or the supporting evidence (or lack thereof) raised potential concerns. This status does not signify a fail, but indicates that the process could be improved.

###  Minor non-conformity

 A control has not been addressed or is not compliant with BS ISO/IEC 27001:2013 guidelines. A course of action to remedy this should be provided with an appropriate time line.

###  Major non-conformity

 A fundamental failing has been identified by the auditor that affects several controls and means that the overall Information Security Management policies cannot be adhered to. Until resolved, such an issue will normally mean the organisation is not compliant with ISO/IEC 27001:2013.


Example of security audit and management responses to issues that were identified

 The Commission recognises that all the requirements listed in Section 4 of the RTS may not apply to certain operators. Sufficient evidence must be supplied within that audit report where any requirement was not applicable.

 Audit reports which do not provide sufficient and clear evidence may not meet the Commission’s requirements and may be rejected.


 Examples of content and style the Commission would expect to see.

 Reference  A.8.3.2  Requirement  Disposal of media  Control  Media should be disposed of securely when no longer required, using formal procedures.  Observations or Evidence  During the audit it was identified that an office computer has been replaced since the previous audit. It was confirmed by management that the old hard disk has been securely disposed by the third-party IT support company. However no documentation or certificate was provided for this process.  Compliant  No  Observation  Minor Non-Conformity  Yes  Major Non-Conformity ###  Partial and non-conformities

 Clearly defined findings assist the licensee’s management and the Commission in understanding the need for taking corrective action.

 In general the format of a finding should be:

* Finding - What was observed;
* Objective Evidence – evidence that supports the finding and describes the situation that exists (finding)
* Consequence - Impact or potential impact of the situation that exists (finding)
* Corrective Action – steps that are taken to address existing non-conformities and make improvements. They solve existing problems and should be based on the Plan, Do, Check, Act model.
* Management response - outlines the management’s response to findings and includes resolution dates and responsible persons.

 Reference  A.8.3.2  Control  Disposal of media  Status  Minor Non-Conformity  Finding  During the audit it was identified that an office computer has been replaced since the previous audit. It was confirmed by management that the old hard disk has been securely disposed by the third-party IT support company. However no documentation or certificate was provided for this process. Sufficient information should be provided to evidence this activity. There is a risk that data may be recovered following device disposal due  to ineffective disposal procedures resulting in confidential information being revealed to external parties.

 Corrective Action / recommendation  Disposal procedures should be updated to ensure that a certificate of disposal is obtained and preserved when any storage media is disposed. This will allow all assets to be clearly tracked from purchase to disposal.  Management response  Company agrees with the recommendation and will update our disposal procedure and ensure adherence, a disposal field  will be added to our asset register recording details of the disposal method, certificate reference and date.

 Resolution date  xxxx 2015


* [Security audit advice](#)
* [Security audit report content](#security-audit-report-content)
* [Security auditor experience](#security-auditor-experience)
* [The scope of testing](#the-scope-of-testing)
* [The audit approach](#the-audit-approach)
* [Audit coverage for aspects provided by third parties](#audit-coverage-for-aspects-provided-by-third-parties)
* [Persons interviewed](#persons-interviewed)
* [Documents reviewed and evidence measures](#documents-reviewed-and-evidence-measures)
* [Sample of an audit report](#sample-of-an-audit-report)

 [Print this guide](#)


Information for running lotteries and raffles including guidance for External Lottery Managers (ELMs).


* [Licence Conditions and Codes of Practice (LCCP)](#generic-legislation-and-policies-lccp)
* [Policies and guidance](#generic-legislation-and-policies-policies-and-guidance)


* [Types of operating licence](#generic-types-of-operating-licence)
* [Licence activities](#lotteries-licences-and-fees-licence-activities)
* [Fees](#generic-fees-you-need-to-pay)
* [Calculating your fees](#generic-calculating-your-fees)
* [Personal Management Licences](#generic-personal-management-licences)
* [Annex A](#generic-annex-a-declaration)


* [Information you'll need for your application](#lotteries-getting-a-licence-information-youll-need-for-your-application)
* [Apply online](#generic-operating-licence-application)
* [Assessing your application](#generic-assessing-your-application)
* [Your licence](#generic-your-licence)


* [Compliance](#generic-compliance)
* [Sector specific compliance](#lotteries-sector-specific-compliance)
* [What you need to tell us](#generic-what-you-need-to-tell-us-when-you-hold-a-licence)
* [Public Register](#generic-public-register)
* [Display of licensed status](#generic-display-of-licensed-status)
* [Making changes to your licence](#generic-making-changes-to-your-licence)
* [Surrendering your licence](#generic-surrendering-your-licence)


 Under the Gambling Act 2005, an arrangement is a lottery if it satisfies one of the following descriptions.

 Lotteries fall under two categories.

 An arrangement is a simple lottery if:

* people are required to pay in order to participate in the arrangement
* in the course of the arrangement one or more prizes are allocated to one or more members of a class
* the prizes are allocated by a process which relies entirely on chance.

 An arrangement is a complex lottery if:

* people are required to pay in order to participate in the arrangement,
* in the course of the arrangement one or more prizes are allocated to one or more members of a class
* the prizes are allocated by a series of processes
* the first of those processes relies entirely on chance.

 You can read more about the legal definition of lotteries in  [Part 1 section 14 of the Gambling Act 2005 (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/part/1/crossheading/lottery)  .


 Information on lotteries, local authority lotteries and External Lottery Managers (ELMs).

* [Society lotteries

 Information for societies who want to run a lottery or raffle, and what the regulations are around such lotteries.](/licensees-and-businesses/page/society-lotteries)
* [**Guidance**  External Lottery Managers (ELMs) - Lotteries

 Information on External Lottery Managers and their role in arranging a lottery on behalf of a society or local authority.](/licensees-and-businesses/guide/external-lottery-managers-elms-lotteries)
* [**Guidance**  Promoting society and local authority lotteries

 Advice for society and local authority lotteries which require a licence or registration September 2014 (updated July 2020)](/licensees-and-businesses/guide/promoting-society-and-local-authority-lotteries)
* [**Guidance**  Promoting multiple society lotteries

 Advice for society lotteries, local authority lotteries and external lottery managers promoting individual lotteries under one brand.](/licensees-and-businesses/guide/promoting-multiple-society-lotteries)
* [**Guidance**  How to run a lottery or fundraiser

 Check if you need a licence to run a lottery or fundraiser and make sure you are fundraising legally.](/public-and-players/guide/how-to-run-a-lottery-or-fundraiser)
* [**Guidance**  Lotteries toolkit

 This lottery toolkit contains advice, quick guides and case studies to help you in your regulatory responsibilities.](/authorities/guide/lotteries-toolkit)
* [**Guidance**  Lottery proceeds - Advice note April 2013 (Updated July 2020)

 Advice for society lotteries, local authority lotteries and external lottery managers about the requirements relating to the distribution of lottery proceeds.](/licensees-and-businesses/guide/lottery-proceeds-advice-note-april-2013-updated-july-2020)


 Gambling in Great Britain and the Gambling Commission's duties and responsibilites are detailed in the Gambling Act 2005.

 The following legislation and policies are also applicable to operating licence holders.

* [Gambling Act 2005

 Gambling Act 2005 (link opens in new window)](https://www.legislation.gov.uk/ukpga/2005/19/contents "Link opens in a new tab")

###  Licence Conditions and Codes of Practice (LCCP)

 The LCCP outlines the requirements that all operating and personal licence holders must follow.

* [**Guidance**  Licence Conditions and Codes of Practice (LCCP)

 The LCCP outlines the requirements that all licensees must follow when running a gambling business or working in the industry.](/licensees-and-businesses/guide/lccp)
###  Policies and guidance

 The following guidance and policies are also relevant for all licensees.

* [**Policy**  Licensing, compliance and enforcement under the Gambling Act 2005

 The Commission’s approach to risk underpins its licensing, compliance and enforcement functions.](/policy/licensing-compliance-and-enforcement-under-the-gambling-act-2005)
* [**Policy**  Statement of principles for licensing and regulation

 The Commission's statement of principles for licensing and regulation.](/policy/statement-of-principles-for-licensing-and-regulation)
* [**Policy**  Statement of principles for determining financial penalties

 The Commission's statement of principles for determining financial penalties.](/policy/statement-of-principles-for-determining-financial-penalties)
* [**Guidance**  Other policies, advice and guidance notes

 We are gradually removing PDF's from our website. Find published advice notes and guidance in PDF's we've not yet converted.](/licensees-and-businesses/page/all-policies-advice-and-guidance-notes)
* [**Guidance**  Anti-money laundering legislation

 Anti-money laundering legislation and regulatory codes of practice operators must comply with.](/licensees-and-businesses/page/anti-money-laundering-legislation)


 There are different types of licence that lottery businesses may need to apply for, you may need more than of the following:

* [operating licence](/licensees-and-businesses/guide/operating-licences)
* [Personal Management Licence](/licensees-and-businesses/guide/personal-management-licence)
* [premises licence](/licensees-and-businesses/page/premises-licence)
* [Annex A for small-scale operators](/licensees-and-businesses/guide/annex-a-declaration)

 We issue operating licences and personal licences; premises licences are issued by local licensing authorities.

###  Types of operating licence

 An operating licence allows you to provide gambling activities to customers in Great Britain.

* [**Guidance**  Operating licences

 An operating licence is required to provide most gambling facilities in Great Britain.](/licensees-and-businesses/guide/operating-licences)
###  Licence activities

 You can apply to us for a licence to provide lotteries in a premises (non-remote) or online (remote).

##  Activities

###  Fees

 The fees you need to pay depend on what you are applying for, and what your anticipated gross gambling yield (GGY) is.

* [**Guidance**  Fees you need to pay and when you should pay them

 Information on the fees for each licence, when these will need to be paid, and the payment methods you can use.](/licensees-and-businesses/page/fees-you-need-to-pay-and-when)
* [**Guidance**  Annual fees

 Information and guidance about annual fees for operating licence holders.](/licensees-and-businesses/guide/annual-fees)
* [**Guidance**  Paying fees

 Find out how to pay fees to the Gambling Commission.](/licensees-and-businesses/page/paying-fees)
###  Calculating your fees

 Our online fees calculator can help you with understanding the amounts of your application, first annual and annual fees.

* [**Service**  Operating licence fees calculator

 Calculate application, first annual and annual fees for operating licences.](https://secure.gamblingcommission.gov.uk/publicfeecalc "Link opens in a new tab")
###  Personal Management Licences

 Personal Management Licences allow people to work in certain roles in a gambling business.

 Some businesses do not require personal licences to be held. Instead, you need to submit an Annex A. These are required for businesses with three employees or less.

* [**Guidance**  Personal Management Licence (PML) guide

 Information on PMLs, including the specific roles that require one, the fees you will have to pay, and how you can apply.](/licensees-and-businesses/guide/personal-management-licence)
###  Annex A

 If your business qualifies as a  [small-scale operator](/licensees-and-businesses/guide/small-scale-operator)  , you can submit an Annex A instead of applying for a Personal Management Licence.

* [**Guidance**  Annex A guide

 Information about Annex As and when they are required.](/licensees-and-businesses/guide/annex-a-declaration)


* [All](#all)
* [Non-remote](#Non-remote)
* [Remote](#Remote)

##  All activities

##  Non-remote licence activities

##  Remote licence activities


* [Non-remote external lottery manager operating licence

 This licence allows you to manage a lottery on behalf of a society or local authority.

 Further details and fees](/licensees-and-businesses/licences-and-fees/non-remote-external-lottery-manager-operating-licence)
* [Non-remote society lottery operating licence

 Society lotteries can only be run for good causes and cannot be run for private or commercial gain. Local authorities can promote a lottery to raise funds to spend on anything where they have power to incur expenditure.

 Further details and fees](/licensees-and-businesses/licences-and-fees/non-remote-society-lottery-operating-licence)
* [Remote external lottery manager operating licence

 This licence allows you to manage a lottery on behalf of a society or local authority.

 Further details and fees](/licensees-and-businesses/licences-and-fees/remote-external-lottery-manager-operating-licence)
* [Remote society lottery licence

 Society lotteries can only be run for good causes and cannot be run for private or commercial gain. Local authorities can promote a lottery to raise funds to spend on anything where they have power to incur expenditure.

 Further details and fees](/licensees-and-businesses/licences-and-fees/remote-society-lottery-licence)


* [Non-remote external lottery manager operating licence

 This licence allows you to manage a lottery on behalf of a society or local authority.

 Further details and fees](/licensees-and-businesses/licences-and-fees/non-remote-external-lottery-manager-operating-licence)
* [Non-remote society lottery operating licence

 Society lotteries can only be run for good causes and cannot be run for private or commercial gain. Local authorities can promote a lottery to raise funds to spend on anything where they have power to incur expenditure.

 Further details and fees](/licensees-and-businesses/licences-and-fees/non-remote-society-lottery-operating-licence)


* [Remote external lottery manager operating licence

 This licence allows you to manage a lottery on behalf of a society or local authority.

 Further details and fees](/licensees-and-businesses/licences-and-fees/remote-external-lottery-manager-operating-licence)
* [Remote society lottery licence

 Society lotteries can only be run for good causes and cannot be run for private or commercial gain. Local authorities can promote a lottery to raise funds to spend on anything where they have power to incur expenditure.

 Further details and fees](/licensees-and-businesses/licences-and-fees/remote-society-lottery-licence)


 You can apply online for a licence from us to provide lottery activities.

###  Information you'll need for your application

 We will ask you to provide information about you and your business as part of your licence application.

* [**Guidance**  What you need to send us when you apply for an operating licence

 Find out which documents you will need when applying for an operating licence for your gambling business.](/licensees-and-businesses/guide/what-you-need-to-send-us-when-you-apply-for-an-operating-licence)
###  Apply online

 You can use our online service to apply for an operating licence.

 If you have not used the service before, you'll need an email address only you can access to be able to create an account.

>  Make sure you include all the information we ask for when you submit your application. If your application is rejected because something is missing, we will not refund your application fee.
>
>

* [**Service**  Apply for a licence to operate a gambling business

 Use this service if you want to apply for a licence to run a gambling business.](https://secure.gamblingcommission.gov.uk/ApplicationHub/Account/Login "Link opens in a new tab")
###  Assessing your application

###  If your application is rejected

 We will send you a letter explaining which documents are missing and you'll need to reapply online.

 You must provide the missing documents, as well as the documents you included originally, and you will need to pay the application fee again.

* [**Guidance**  How we assess operating licence applications

 Find out what we consider when assessing an operating licence application.](/licensees-and-businesses/guide/page/how-we-assess-operating-licence-applications)
###  Your licence

 If we grant you a licence to run a gambling business, you will be able to download a copy of your licence from eServices.

 You must make your licence available for inspection by request from Gambling Commission staff, licensing authority staff or other official bodies such as the police or fire service.

* [**Service**  eServices for operating licence holders

 eServices allows operating licence holders to make changes to their licence, submit regulatory returns and other notifications to the Gambling Commission.](https://secure.gamblingcommission.gov.uk/EServices/Account/Login?ReturnUrl=%2feservices "Link opens in a new tab")


 An important part of the Gambling Commission’s work is to ensure that licence holders are compliant. Compliance requires licence holders to understand and act in accordance with:

* the  [Gambling Act 2005](https://www.legislation.gov.uk/ukpga/2005/19/contents)
* regulations (statutory instruments) made under the Gambling Act 2005
* the  [Licence conditions and codes of practice (LCCP)](/licensees-and-businesses/lccp)

 Compliance activity is based on risk and the risk that each licensed activity poses to the Gambling Commission’s licensing objectives.

 The three licensing objectives are:

* keeping crime out of gambling
* ensuring gambling is conducted fairly and openly
* protecting children and vulnerable people from being harmed or exploited by gambling.

###  Compliance

 Guidance and information for running a compliant gambling business. Including information on how we carry out assessments, your responsibilities under the LCCP and other gambling-related legislation.

* [**Hub**  Compliance

 How we do compliance assessments and important compliance information.](/licensees-and-businesses/compliance)
###  Sector specific compliance

 Guidance and information for the lottery sector.

* [**Guidance**  Lotteries: sector specific compliance

 Sector specific compliance for lotteries (or raffles) and the regulations around them.](/licensees-and-businesses/page/lotteries-sector-specific-compliance)
* [**Guidance**  Lottery submissions guidance

 Guidance for information collected in the Lottery Submissions service.](/guidance/lottery-submissions-guidance)
* [**Guidance**  Using SMS short codes for lottery promotion

 Guidance around using SMS short codes to promote lotteries.](/licensees-and-businesses/page/using-sms-short-codes-for-lottery-promotion)
* [**Guidance**  Societies running lotteries for other good causes

 Guidance for societies who want to run a lottery for other good causes, and the rules and regulations around such lotteries.](/licensees-and-businesses/page/societies-running-lotteries-for-other-good-causes)
* [**Guidance**  Lottery proceeds - Advice note April 2013 (Updated July 2020)

 Advice for society lotteries, local authority lotteries and external lottery managers about the requirements relating to the distribution of lottery proceeds.](/licensees-and-businesses/guide/lottery-proceeds-advice-note-april-2013-updated-july-2020)
###  What you need to tell us

 You are required to tell us about certain things that happen in your business, these are dependent on the licences and activities you hold.

* [**Guidance**  What you need to tell us when you hold an operating licence

 This guidance summarises all of the types of data and information that you are required to tell us when you hold an operating licence.](/licensees-and-businesses/guide/what-you-need-to-tell-us-when-you-hold-an-operating-licence)
* [**Guidance**  Key events for operators

 These guides will inform you of the key events you must tell us about when you hold an operating licence.](/licensees-and-businesses/guide/key-events-for-operators)
* [**Guidance**  Guidance to operators for age verification test purchasing (non-remote)

 This guidance explains what data we need from you about age verification test purchasing when you hold a non-remote operating licence.](/guidance/guidance-to-operators-for-age-verification-test-purchasing-non-remote)
* [**Guidance**  Regulatory returns guidance

 Guidance for information collected in the Regulatory Returns service by licensing sector.](/guidance/regulatory-returns-guidance)
* [**Guidance**  Assurance statements

 This guidance explains our data and information requirements if you are required to send us an assurance statement.](/licensees-and-businesses/guide/assurance-statements)
* [**Guidance**  Gaming machine and remote games information requirements

 This guidance explains our data and information requirements for games test, games annual audit and security audit reports.](/licensees-and-businesses/guide/gaming-machine-and-remote-games-information-requirements)
###  Public Register

 We provide details of all businesses and individuals we licence on our  [Public Register](/public-register)  service.

 When you are issued a licence, we will display the details of your licence on the register.

 This includes:

* your head office address
* details of the activities you are licensed for and from when
* domain and trading names you've told us about, and
* details of any regulatory action that has been carried out.

* [**Service**  Public Register of licensees, premises and regulatory actions

 The register lets you search and download information about licensed businesses, individuals and premises. You can also find information about regulatory action we have taken against licensees.](/public-register "Link opens in a new tab")
###  Display of licensed status

 If you hold a remote licence, the gambling websites and apps you provide must show details about your licence and link to your public register licence information.

>  This is a condition of your licence under  [LCCP Condition 8 - Display of licensed status](/licensees-and-businesses/lccp/1/8)  .
>
>

###  Making changes to your licence

 You can make most changes to your licence online, using eServices.

 You can:

* add or remove licence activities
* change the activity fee category up or down
* add or remove management or key people in the business
* add or remove trading names
* add or remove domain names for websites where you provide gambling.

>  Some of these  [changes require you to pay a fee](/licensees-and-businesses/guide/make-changes-to-your-operating-licence)  .
>
>

* [**Service**  eServices for operating licence holders

 eServices allows operating licence holders to make changes to their licence, submit regulatory returns and other notifications to the Gambling Commission.](https://secure.gamblingcommission.gov.uk/EServices/Account/Login?ReturnUrl=%2feservices "Link opens in a new tab")
###  Surrendering your licence

 If you no longer need your licence, you can surrender it.

* [**Guidance**  Surrender your operating licence

 Find out how to surrender your operating licence partially or in full.](/licensees-and-businesses/page/surrender-your-operating-licence)


>  Lotteries (or raffles) can only be run for good causes. Society lotteries are promoted for the benefit of a non-commercial society.
>
>

 A society is non-commercial if it is established and conducted for:

* charitable purposes
* the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity
* any other non-commercial purpose other than that of private gain.


 A large society lottery:

* has proceeds that exceed £20,000 for a single draw
* has aggregate proceeds from lotteries in excess of £250,000 in any one year  [requires a licence from the Gambling Commission](/licensees-and-businesses/licences-and-fees/non-remote-society-lottery-operating-licence)  .


 A small society lottery:

* does not have proceeds that exceed £20,000 for a single draw
* does not have aggregate proceeds from lotteries in excess of £250,000 in any one year
* does not require a Gambling Commission licence
* must be registered with the local authority in the area where the principal office of the society is located.

 Details of registration requirements and procedures should be available from the licensing department of the relevant local authority. Application forms for registration to  [run a small society lottery](/public-and-players/guide/page/licences-for-small-society-lotteries)  can be obtained from your local licensing authority.


Making changes to the draw date of society lotteries

 If you are a small society lottery registered with a local authority you need to contact your local authority in case they have specific terms and conditions you must adhere to.

 If you are large society lottery you need to notify us of the new draw date by email:  [licensing@gamblingcommission.gov.uk](mailto:licensing@gamblingcommission.gov.uk)

 If you put back the date of the draw, it will need to take place as soon as practically possible.

 You must make every attempt to notify those who have purchased tickets in the lottery or raffle of the change to the draw date.

 The notification may be through a number of channels, including:

* email
* telephone or text message
* your website
* a newsletter
* your local newspaper.


 Some files may not be accessible for users of assistive technology. If you require a copy of the file in an accessible format  [contact us](/forms/formatrequest)  with details of what you require. It would help us to know what technology you use and the required format.

 **PDF Files**  Some PDF files cannot be displayed in a browser, you will see a message saying 'Please wait...'. If you see this message, you will need to download the file and open it in  [Adobe Acrobat Reader (opens in a new tab)](https://get.adobe.com/reader/)  .

 [Organising small lotteries

 application/pdf PDF 244.5 kB](//assets.ctfassets.net/j16ev64qyf6l/43KrQwpbweGRKZId0AUobc/3ab8b5345034bfd33d4d62bf3de9a740/Organising-small-lotteries.pdf)

---

 Last updated: 11 June 2021

 Show updates to this content  No changes to show.


External Lottery Managers (ELMs) - Lotteries

 An ELM makes arrangements for a lottery on behalf of a society or local authority but is not a member, officer or employee of the society or local authority. A society or local authority and an ELM must be separate entities and be able to demonstrate that they are independent of each other.

 Societies and local authorities can employ ELMs to manage all or part of their lotteries so that societies and local authorities may benefit from the experience or economies of scale that come with employing an ELM.


The purpose of society and local authority lotteries

 The intention of the Gambling Act 2005 (the Act) is to allow non-commercial societies to use a lottery as a means of raising funds from the public for the cause promoted by the society or for the local authority for any purpose for which they have the power to incur expenditure.

 The provisions are relatively limited in scope. It is not the intention of the Act to allow society or local authority lotteries to be promoted for private or commercial gain although it is accepted that an ELM is a commercial business that usually exists to produce a commercial profit.

##  ELM licensing requirements

##  Raising money for good causes

##  Licence conditions and codes of practice relating to ELMs

##  Social responsibility considerations for ELMs

##  Information on proceeds and prizes to lottery players

##  Compliance and non-compliance - ELMs

##  Compliance

##  Non-compliance

---

 Last updated: 1 November 2021

 Show updates to this content  No changes to show.


 An ELM must hold a  [lottery manager operating licence](/licensees-and-businesses/licences-and-fees/sector/lotteries#lotteries-licences-and-fees)  before they can promote a society or local authority lottery. The ELM (and the relevant society or local authority) will also need to hold a remote gambling licence if they intend to sell tickets by means of remote communication (eg internet, telephone).

>  It is the responsibility of both the society, or local authority, and the ELM to ensure that the other party holds the relevant operating licence before they enter into any arrangements regarding the promotion of lotteries.
>
>


 It is not the intention to allow society or local authority lotteries to be promoted for private or commercial gain although it is accepted that an ELM is a commercial business that usually exists to produce a commercial profit.

 Each society or local authority lottery must return a  **minimum of 20% of the proceeds**  to the purposes of the society or local authority (the good cause).

 They must provide consumers with information about the proportion of lottery proceeds (ticket sales) returned to good causes or for local authority expenditure, in a calendar year.

 The fact that a society or local authority may employ a licensed ELM to manage all or part of its lottery does not absolve the society or local authority from its responsibility for ensuring that the lottery is conducted in such a way as to ensure that it is lawful and fully compliant with the  [Gambling Act 2005 (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/contents)  , related regulations and all  [licence conditions and codes of practice](/licensees-and-businesses/lccp/online)  .


Licence conditions and codes of practice relating to ELMs

All licensed ELMs are required to comply with specific conditions and codes of practice relevant to them. The specific licence conditions are set out at the time a licence is issued and are printed on the licence.


Social responsibility considerations for ELMs

 Lotteries are a form of gambling and as such ELMs are required to ensure that children and other vulnerable people are not harmed or exploited by their lottery. Societies and local authorities have the same requirements placed on them.

 Further information about social responsibility is available in Licence conditions and codes of practice (LCCP)  [Licence conditions and codes of practice (LCCP)](/licensees-and-businesses/lccp/online)  .


Information on proceeds and prizes to lottery players

 Social responsibility codes attached to all lottery operating licences include a requirement to take account of the Commission’s guidance on providing information to lottery players about how proceeds are used and the likelihood of winning a prize and how those prizes are allocated. This information must be available prior to participating in a lottery.

 Further information about these requirements can be found in the Commission’s guidance Information to lottery players: proceeds and prizes  **PDF needs turning into HTML**  .


 We require all lottery operators to comply with the objectives of the  [Gambling Act 2005 (the Act) (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/contents)  and the licence conditions.

 In circumstances where either a breach of the Act or the licence conditions occurs, we take this seriously and consider what criminal or regulatory action needs to be taken. This may include a review of the ELM’s operating licence, which could result in a formal warning, additional licence conditions, a financial penalty or suspension or revocation of the operating licence. Further details can be found in the Commission’s Licensing, compliance and enforcement policy statement.

 In circumstances where the ELM is deemed to have committed a breach of the Act or the licence conditions, we may also consider acting against the society or societies whose lotteries they promote. This would be the case where the society was deemed to have failed in ensuring the lottery was conducted to be lawful and fully compliant with the Act, related regulations and all licence conditions and codes of practice.


In circumstances where an ELM has been deemed to have committed a breach of the Act or the licence conditions we may consider taking action against the society or societies they promote lotteries for. This would be the case where the society was deemed to have failed to ensure that the lottery was conducted in such a way as to ensure that it was lawful and fully compliant with the Act, related regulations and all  [Licence conditions and codes of practice](/licensees-and-businesses/lccp/online)  .


* [External Lottery Managers (ELMs) - Lotteries](#)
* [ELM licensing requirements](#elm-licensing-requirements)
* [Raising money for good causes](#raising-money-for-good-causes)
* [Licence conditions and codes of practice relating to ELMs](#licence-conditions-and-codes-of-practice-relating-to-elms)
* [Social responsibility considerations for ELMs](#social-responsibility-considerations-for-elms)
* [Information on proceeds and prizes to lottery players](#information-on-proceeds-and-prizes-to-lottery-players)
* [Compliance and non-compliance - ELMs](#non-compliance-elms)

 [Print this guide](#)


>  This is an HTML version of this advice. You can also view or download the  [original Promoting society and local authority lotteries (PDF)](#5UPQqclReV5jtP2itSytYG)  published in September 2014 and updated July 2020.
>
>

 Lotteries are illegal unless they fall into one of the categories specifically permitted by law. Apart from The National Lottery (which has its own dedicated legislation), the relevant law is contained in  [the Gambling Act 2005 (the Act) (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/contents)  . The Act creates eight categories of permitted lottery.

 Three of these categories (small and large society lotteries and local authority lotteries) require either a licence from the Gambling Commission (the Commission) if they are a large society or local authority lottery, or registration with a licensing authority if they are a small society lottery. This advice relates to these lotteries.

 Advice on the remaining five categories can be found in  [Organising small lotteries (PDF)](#5p756U3GQ8tAWNATMCsjXv)  .

 This advice is not comprehensive or a binding interpretation of the law and anyone intending to run a lottery should refer to the Act and if necessary seek independent legal advice to ensure that they conform to the law before proceeding. Separate advice has been issued to local authorities in respect of small society lotteries under their jurisdiction.

 The Act has three licensing objectives that are central to the regulatory regime and underpin the functions that the Commission and licensing authorities perform in respect of all types of gambling, including lotteries. These are:

* preventing gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime
* ensuring that gambling is conducted in a fair and open way
* protecting children and other vulnerable people from being harmed or exploited by gambling.

##  Definition of a lottery

##  Meaning of society and local authority lotteries

##  Society lotteries

##  Local authority lotteries

##  Large society and local authority lottery licensing requirements

##  Small society lotteries

##  Personal Management Licences

##  External Lottery Managers (ELMs)

##  External Lottery Managers and service providers

##  Remote lotteries

##  Gambling Commission licence conditions and codes of practice

##  Society and local authority lotteries - proceeds and other monetary limits

##  Information to lottery players: proceeds and prizes

##  Ticket information

##  Sale of tickets

##  Where tickets may be sold

##  Financial requirements

##  Lottery submissions

##  Social responsibility

##  B3A lottery machines

##  Proceeds and profits

##  Misusing profits of lotteries

##  Files


 In simple terms a lottery is a kind of gambling that has three essential elements:

* payment is required to participate
* one or more prizes are awarded
* those prizes are awarded by chance.

 This is set out more formally in the Act which defines two types of lottery, a simple lottery and a complex lottery.

 An arrangement is a simple lottery if:

* people are required to pay to participate in the arrangement
* in the course of the arrangement one or more prizes are allocated to one or more people in a class the prizes are allocated by a process which relies wholly on chance.

 An arrangement is a complex lottery if:

* people are required to pay to participate in the arrangement
* in the course of the arrangement one or more prizes are allocated to one or more people in a class
* the prizes are allocated by a series of processes
* the first of those processes relies wholly on chance.

 In addition,  [section 14(5) of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/14)  stipulates that, for the purpose of these definitions, a process that requires people to exercise skill or judgment or display knowledge is to be treated as relying wholly on chance if:

* the requirement cannot reasonably be expected to prevent a significant proportion of people who participate in the arrangement from receiving a prize
* it cannot reasonably be expected to prevent a significant proportion of people who wish to participate in the arrangement from doing so.


 Society lotteries are lotteries promoted for the benefit of a non-commercial society. Such societies are organisations that have distinct aims and objectives and meet the definition of a non-commercial society set out in the Act.

 A society is non-commercial if it is established and conducted:

* for charitable purposes
* for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity
* for any other non-commercial purpose other than that of private gain.


Local authority lotteries are lotteries promoted by local authorities themselves. These differ from society lotteries registered with a licensing authority. Authorities may use the net proceeds of such lotteries for any purpose for which they have power to incur expenditure.


Large society and local authority lottery licensing requirements

 A society lottery is a large lottery and may only be run under an operating licence issued by the Commission if the arrangements for that lottery are such that total proceeds (ticket sales) from it:

* may in a single society lottery exceed £20,000
* the proceeds of previous lotteries in the same calendar year have already reached or may, taking into account the lottery in question reach £250,000 in one calendar year.

 If a society promotes a lottery which, applying the above rules, is a large lottery (the first lottery) then every subsequent lottery it promotes in that year and in the following three years will also be a large lottery and will require the society to hold a lottery operating licence issued by the Commission.

 All local authority lotteries must be run under an operating licence issued by the Commission.

 Societies and local authorities that allow players to participate in their lotteries by means of remote communication (internet, telephone etc) will be required to hold a remote lottery operating licence, whether or not their activities also require them to hold a non-remote lottery operating licence.

 General information about the Commission's licensing requirements is given in this document. Specific guidance is available on the Commission's website.


 Societies that run small society lotteries, that is to say lotteries in which no more than £20,000 worth of tickets are put on sale and where the society’s aggregate proceeds from lotteries do not exceed £250,000 a year may operate without a Commission licence provided they register with their licensing authority. Where it becomes apparent that a small society lottery will exceed either of the monetary limits, it is the responsibility of the society to ensure they apply to the Commission for a licence, before the limit is exceeded.

 The promoting society of a small society lottery must, throughout the period during which the lottery is promoted, be registered with a licensing authority in England and Wales or a licensing board in Scotland.

 The societies are required to be registered with their licensing authority in the area where their principal office is located. If the local authority believes that the society’s principal office is situated in another area it should inform the society as soon as possible and if possible inform that other authority.

 Details of registration requirements and procedures can be obtained from the licensing department of the relevant local authority.

 Societies that run small society lotteries under registration with a licensing authority and that sell tickets by means of remote communication (internet, telephone etc) are not required to hold a remote gambling licence issued by the Commission.


 A society or local authority licensed by the Gambling Commission is required to have at least one  [Personal Management Licence (PML)](/licensees-and-businesses/guide/personal-management-licence)  holder if they have more than three people in qualifying positions.

 A qualifying position is one where an individual by the terms of their appointment has primary responsibility for:

* the management of the licensed activity (ie the lottery)
* the financial affairs of the society
* ensuring the society complies with the requirements of the Gambling Act
* the marketing of the lottery
* management of the IT used in connection with the lottery.

 In deciding who should hold the PML a society or local authority should identify the relevant senior individual who takes overall management responsibility for the promotion and proper management of the lottery and for compliance with the regulatory regime as a whole. The PML holder must be a trustee or officer of an unincorporated society, a director of a corporate society or a partner where the society is a partnership. In the case of a local authority lottery the PML holder must be someone in a senior management post who holds the relevant delegated authority from the licensing authority.

 If a society has three or fewer people in qualifying positions they will qualify as a small scale operator and will be exempt from the need to have a PML holder. In those circumstances one individual from the society who is identified as the senior person responsible for the overall conduct of the lottery (usually the chief executive, a trustee, director or member of the senior management board) must complete the personal declaration,  [Annex A declaration](/licensees-and-businesses/guide/annex-a-declaration)  , of the Operating Licence application form and submit it to the Commission along with a Criminal Records Bureau form.

 A society must not operate any lottery unless it has at least one PML holder or at least one Individual who has submitted an Annex A and is named on the operating licence. If the people holding PMLs or the people who have previously submitted Annex A Personal Declarations under the small scale operator exemption change, the society must notify the Commission as soon as possible. If departures leave the society without a PML holder or anyone who has submitted an Annex A, then a new individual needs to make an application for a PML, or in the case of those operators subject to the small scale operator exemption, submit an Annex A. The latter will also require an amendment to the operating licence. Both instances will require a Criminal Records Bureau check as well as appropriate payment.


 A licensed or registered society or local authority may employ an external lottery manager (ELM) to manage all or part of its lottery. An ELM is defined in section  [section 257 of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/257)  as someone that is a person or a body who makes arrangements for a lottery on behalf of a society or local authority but is not a member, officer or employee of the society or authority.

 All ELMs must hold a lottery manager’s operating licence issued by the Commission before they can manage a licensed society or local authority lottery or a society lottery registered with a local authority. It is the responsibility of the society or local authority to ensure that before employing anyone to manage all or part of their lottery that person or body holds a valid lottery manager’s operating licence issued by the Commission. A list of licensed ELMs is available on the Commission's website.

 The fact that a society or local authority may employ a licensed ELM to manage all or part of its lottery does not absolve the society or local authority from its responsibility for ensuring that the lottery is conducted in such a way as to ensure that it is lawful and fully complies with all licence conditions and the codes of practice. Both the society or local authority and the ELM require an operating licence from the Commission.

 ELMs are also required to hold Personal Management Licences for a range of directors and senior managers, including:

* the managing director
* chief executive
* finance director
* compliance manager
* marketing manager
* IT manager.

 ELMs also need to hold a remote gambling licence if they intend to sell tickets by means of remote communication (internet, telephone etc).


External Lottery Managers and service providers

 Uncertainty can arise as to whether services provided to societies or local authorities amount to the promotion or facilitation of a lottery, in which case the provider needs an external lottery manager (ELM) licence if they are to avoid committing an offence, or instead amount to the provision of services which do not amount to promotion or facilitation, in which case no licence is needed. The following paragraphs give some guidance on the distinction. But anyone who is uncertain whether the services provided require the provider to hold an ELM licence should contact the Commission for advice.

 Under  [section 252 of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/252)  , a person promotes a lottery if they make or participate in making the arrangements for a lottery. It says further that a person promotes a lottery in particular if they:

* make arrangements for the printing of tickets
* make arrangements for the printing, publication and distribution of promotional material
* make arrangements to advertise a lottery
* invite an individual to participate in a lottery
* sell or supply tickets
* offer to sell or supply tickets
* use premises for the purpose of allocating prizes or for any other purpose connected with the administration of a lottery.

 Promotional material is defined as a document that advertises, invites participation, contains information about how to participate, or lists winners, in a particular lottery.

 A person commits an offence under the Act if they carry out any of these activities on behalf of a society or local authority unless:

* they are an officer, employee or a member of a licensed or registered societyor local authority
* they are a licensed ELM directed by a society or local authority to run all or part of its lottery.

 Under  [section 259 of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/259)  , a person facilitates a lottery if they:

* print lottery tickets for a specified lottery
* print promotional material for a specified lottery
* advertise a specified lottery.

 A person commits an offence of facilitating a society or local authority lottery unless they act in accordance with an operating licence.

 Whether or not a person or body carrying out activities on behalf of a society or local authority requires licensing as an ELM will depend on the activities they conduct and whether they amount to either promoting or facilitating a lottery and, if so, the circumstances in which they carry out those activities. For instance companies which print tickets for or which advertise lotteries under direction from licensed or registered societies or licensed ELMs do not themselves require a licence because, although they are facilitating a lottery, they are acting in accordance with a licence held by someone else.

 To take another example, direct mailing companies employed by society lotteries may be classed as either a service provider or ELM, depending on the functions they carry out. If their only role is to post tickets to people to participate in the lottery from a list provided by the society or ELM, the Commission does not think they are doing any of the things that fall into the definition above of promoting a lottery. However, where a person or body is responsible for and manages part or all of the lottery and decides issues such as where to target promotional material, sources people to enter the lottery and deals with ticket transactions, they are carrying out functions that are caught by the definition of promoting a lottery and require a licence.

 The Commission considers that the Act provides a comprehensive definition of what amounts to promoting or facilitating a lottery for the purpose of determining whether an ELM licence is needed for people or bodies providing services to societies or local authorities. In cases where there is doubt whether or not a person or body is acting in the role of an ELM, the Commission will have regard to the overall management and degree of control of the lottery undertaken by the society and the other party in question. Where the person or body making any of the arrangements for a society or local authority lottery, for example, has control of how the lottery is promoted and managed, the Commission’s view is that they will be acting as an ELM and will need to hold the relevant operating licence issued by the Commission if they are to avoid committing an offence under the Act.

###  Key indicators the Commission uses in reaching a conclusion include:

* who decides how the lottery scheme will operate and when changes to the scheme should be made
* who controls the promotion, marketing and advertising of the lottery
* who sells the tickets
* who pays the prizes
* who appoints and manages sub-contractors
* banking arrangements and the process for handling the proceeds of the lottery
* the contractual agreements between the society and the other party.


 [Section 4 of the Gambling Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/4)  specifies that remote gambling means gambling in which people participate by the use of remote communication including the internet, telephone, television, radio or any other electronic or technological method of communication. Normal letter post is not a form of remote communication for the purposes of the Act.

 Societies and local authorities requiring licensing by the Commission and which allow players to participate in their lotteries by means of remote communication will be required to hold a remote lottery operating licence. For example, those accepting payments by telephone, or over the internet, will require a remote operating licence.

 Holders of a remote lottery operating licence will be required to comply with the technical standards and the other specific licence conditions and codes of practice issued by the Commission that relate to remote gambling. Only remote lottery operating licence holders that accept more than £250,000 worth of entries by remote means per year will be required to meet the full testing and third party security audit requirements. The remote technical standards do not apply to holders of an ancillary remote lottery licence. Further details are available on the Commission's website.

 Societies registered with licensing authorities that allow people to participate in their lottery by way of remote communication are not required to hold a remote lottery operating licence.


Gambling Commission licence conditions and codes of practice

 All societies and local authorities licensed by the Commission to run lotteries are required to comply with the specific licence conditions and codes of practice relevant to them. The specific licence conditions are set out at the time a licence is issued.

 Some of the licence conditions and requirements of the codes of practice are referred to below. Specific details are contained in the  [Licence Conditions and Codes of Practice](/licensees-and-businesses/lccp/online)  .


Society and local authority lotteries - proceeds and other monetary limits

 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.

 Up to a maximum of 80% of the gross proceeds of each lottery may be divided between prizes and the expenses of the lottery.

 In a single large society or local authority lottery the maximum value of tickets that can be sold is £5 million. The maximum aggregate value of lottery tickets that can be sold in any calendar year is £50 million (pro-rata limit of £31,311,475 in 2020).

 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 large society or local authority lottery that sells the maximum number of tickets in a single lottery (£5 million) could award a maximum top prize of £500,000.

 Rollovers are permitted provided the maximum single prize limit is not breached.

 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.

 There is no maximum price of a lottery ticket.

 No lottery organised by a large society or local authority may operate in such a way that a player can win a prize greater than the statutory prize limit of £500,000.

 No lottery organised by a large society or local authority 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 £500,000.

 Where separate lotteries have a feature that allows a player to win a larger prize than the statutory maximum of £500,000 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. A lottery cannot be linked to a prize competition or free draw if the maximum amount which a person can win is more than £500,000 in aggregate.

 Where separate lotteries have a feature that allows a player to win a larger prize than the statutory maximum of £500,000 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. A lottery cannot be linked to a prize competition or free draw if the maximum amount which a person can win is more than £500,000 in aggregate.


 Social responsibility codes attached to all lottery operating licences include a requirement to take account of the Commission’s guidance on providing information to lottery players about how proceeds are used and the likelihood of winning a prize and how those prizes are allocated.  This information must be available prior to participating in a lottery.

 Further information about these requirements can be found in the Commission’s guidance  [Information to lottery players: proceeds and prizes](/licensees-and-businesses/guide/information-to-lottery-players-proceeds-and-prizes)  .

 This requirement is in addition to the current provision in social responsibility code (4.3.1), which requires all society and local authority lottery licensees to publish annually the proportion of lottery proceeds (as a percentage) returned to the purposes of the society or local authority, in the previous calendar year. This should be through either their annual report, lottery page of their society or local authority website or any other means appropriate to the size and scale of the organisation.


 All tickets in a society lottery or local authority lottery licensed by the Commission or society lottery registered with a local authority must state:

* the name of the society on whose behalf the lottery is being promoted
* the price of the ticket
* the name and address of the member of the society responsible for the promotion of the lottery. In the case of a small society lottery run under local authority registration the name and address of the ELM if there is one may be given as an alternative
* the date of the draw, or the means by which the date may bedetermined
* the fact, where that is the case, that the society is licensed by theCommission
* the website address of the Commission, if licensed by the Commission.

 Tickets that are issued through a form of remote communication or any other electronic manner must specify the information above to the purchaser of the ticket and ensure that the message can be either retained (saved) or printed.


Tickets in society and local authority lotteries promoted under licence from the Commission must not be sold to anyone in a street.


 They can be sold:

* by a person in a static structure such as a kiosk or display stand
* from a shop premises in a street, or,
* door to door.

 For this purpose a ‘street’ includes any bridges, road, lane, footway, subway, square, court, alley or passage (including passages through enclosed premises such as shopping malls) whether a thoroughfare or not. Society lotteries and/or the responsible ELM must also ensure that they have any necessary local authority permissions, such as a street trading licence. The Commission has recommended to licensing authorities that they also apply this restriction to small society lotteries. Small societies should check with the licensing authority they are registered with.

 Lottery tickets must not be sold to, or by, those under the age of 16.

 Society lottery tickets may be sold from vending machines. These machines may be sited anywhere that a society lottery ticket can be sold, as mentioned previously.

 They are not subject to restrictions on the number that can be sited and no licence is required to site or supply them. However, licensed operators (societies and/or ELMs) must ensure that they fulfil their social responsibility duties under the licence conditions and codes of practice in respect of preventing underage play and problem gambling. In the case of lottery ticket vending machines the operator may wish to ensure that the machine is located in a supervised area or that some other arrangements are put in place to prevent underage and problem gambling.

 To minimise the risk of fraud, societies licensed by the Commission should adopt one or more of the following measures when sending unsolicited mailings of lottery tickets:

* prohibit the unsolicited mailing of lottery tickets to non-members of the promoting society
* limit the value of tickets sent to any one address which is not that of a member of the promoting society to £20
* maintain records of tickets distributed and not returned. The Commission recommends that these records should include details of the address to which the tickets have been sent, their total value and their serial number. Information on unsold tickets not returned by the date of the lottery draw should be retained for at least six months.

 Society lottery operator licences (remote and non-remote) from the Commission allow societies to sell lottery tickets within Great Britain (England, Scotland, and Wales). If you wish to sell lottery tickets outside of Great Britain you will need to check the laws that apply in that jurisdiction.


 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:

* the total proceeds
* the amount allocated to prizes
* the amount of proceeds allocated to expenses, and details of those expenses
* the amount applied directly to the purposes of the society or the purposes for which the local authority has power to incur expenditure as the case may be
* the number of sold and unsold tickets in each lottery.

 Where the cumulative proceeds of lotteries promoted by a society or local authority exceed £1,000,000 in a calendar year, the Commission must be sent a written confirmation from a statutory auditor that the proceeds of those lotteries have been fully accounted for in annual audited accounts. Such confirmation must be provided within ten months of the end of the period to which the accounts relate.

 A statutory auditor is someone who is eligible for appointment as a company auditor under section 1210 of the Companies Act 2006 but is not, in the case of a society:
 **a)**  a member of the society
 **b)**  a partner, officer or employee of such a member
 **c)**  a partnership of which a person falling within (a) or (b) is a partner.


 Every society and local authority licensed by the Commission must provide a submission for each lottery. This must show the total proceeds and how they have been distributed between prizes and expenses and the amount applied directly to the society’s purposes, or purpose for which the local authority has power to incur expenditure.

 A licensed society’s or local authority’s submission must be sent to the Gambling Commission no later than three months after the date of the lottery draw or in the case of an instant (scratchcard) lottery within three months of the last date on which tickets in the lottery were on sale. At the time it is submitted each submission must be verified by a Personal Management Licence holder, a qualified person in the case of a small scale operator or the person (in the case of societies) named on the lottery tickets as being responsible for the promotion of the lottery.

 Lottery submissions should be completed online through the Commission’s  [eServices portal (opens in a new tab)](https://secure.gamblingcommission.gov.uk/EServices/Account/Login?ReturnUrl=%2feservices)  . Guidance on how to complete a lottery submission is available throughout the online system.

 Every society registered with a local authority to run small society lotteries must submit a statement providing the following information:

* the date on which tickets were available for sale or supply and the date of the draw
* the total proceeds of the lottery (remote and non-remote)
* the amounts deducted by promoters of the lottery in providing prizes, including rollovers
* the amounts deducted by the promoters of the lottery in respect of costs incurred in organising the lottery
* the amount applied directly to the purpose for which the promoting society is conducted or for which the local authority has power to incur expenditure (at least 20% of the gross proceeds)
* whether any expenses incurred in connection with the lottery were not paid for by deduction from the proceeds, and, if so, the amount of expenses and the sources from which they were paid.

 A registered society’s statement must be sent to the local authority within three months beginning on the day the draw (or last draw) in the lottery took place. It must be signed by two members of the society appointed in writing for that purpose by the society’s governing body and accompanied by a copy of that appointment.


 Lotteries are a form of gambling and as such societies and local authorities are required to ensure that children and other vulnerable people are not exploited by their lottery.

 The minimum age for participation in a society or local authority lottery is 16 years of age. A person commits an offence if they invite or allow a child to enter such a lottery. Licensed societies and local authorities running lotteries must have written policies and procedures in place to help prevent and deal with cases of under-age play.

 Licence holders must take all reasonable steps to ensure that information about how to gamble responsibly and how to access information and help in respect of problem gambling is readily available.

 Further information about social responsibility requirements is contained in the Commission’s  [Licence Conditions and Codes of Practice](/licensees-and-businesses/lccp/online)  .


[Section 235(2)(d) of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/235)  and Regulations under that section define a B3A machine as one where the results of the lottery are determined by the machine and/or the machine displays the results of the lottery without an interval of at least one hour between the sale of the ticket and the announcement of the result. These machines can only be sited in a members’ club or miners’ welfare institute holding a club gaming or club machine permit issued by the licensing authority. Clubs and institutes are entitled to site one category B3A machine on the premises.


 [Section 254 of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/254)  clarifies what is meant by ‘proceeds’ and ‘profits’ of alottery.

 ‘Proceeds’ are the total amount paid for tickets before any deductions.

 ‘Profits’ are the amount of proceeds less any deductions for prizes, rollovers, and reasonable expenses incurred in connection with running the lottery.


Under  [section 260 of the Act (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/260)  it is an offence to use or permit profits from a large society or local authority lottery to be used for any purposes other than for the purpose for which the lottery was permitted or promoted.  [Section 261 (opens in a new tab)](https://www.legislation.gov.uk/ukpga/2005/19/section/261/enacted)  applies the same offence to small society lotteries.


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 [Promoting Society and Local Authority Lotteries

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 Last updated: 7 June 2021

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