Workplace sweepstakes: how to make sure you don’t fall foul of the rules

With Euro 2024 kicking off in no time and horse racing at Royal Ascot around the corner, many workplaces are running sweepstakes as a fun way of trying to participate and win some cash. Although popular and seemingly harmless, there are clear rules on how to run a sweepstake legally. In this article, we discuss the Gambling Act 2005 (the “Gambling Act”) and offer some tips to help your sweepstake stay onside this summer of sport.

As outlined in Raj Pahuja’s article, the Gambling Act sets out the laws relating to lotteries and gambling in Great Britain, and the Gambling Commission is the regulator of the gambling industry.

Entering into a sweepstake that operates on the basis of chance, e.g., a football tournament, may fall within the definition of a “lottery” under the Gambling Act, the qualifications of which are:

• Participants have to pay in order to enter
• There is at least one prize
• The prize(s) are assigned by chance.

It is illegal to “promote” a lottery – i.e., sell lottery tickets and advertise a lottery – unless it falls within one of the Gambling Act’s exemptions or the promoter has a lottery operating licence. The Gambling Act does, however, provide an exemption which may be relevant if you are running a sweepstake in your workplace, and this is called the “work lottery” exemption.

Tips on how to run your workplace sweepstake

In order to rely on the “work lottery” exemption and run a sweepstake without a licence, you must comply with the following rules:

Profit: You cannot make a profit from a work lottery. You can only use this type of lottery to either raise money for good causes, or just for fun. Any proceeds must either be used for prizes or reasonable expenses, or donated to charity.

Location: Everyone participating in the sweepstake must work at the same physical location, e.g. an office, shop or other place of work. You cannot run a sweepstake across multiple sites.

Tickets: You cannot sell tickets online, via email or telephone. You must provide physical tickets to participants, though there are no specific requirements for what needs to be printed on the tickets.

The draw: You cannot do the draw online – it must be done on your businesses’ physical premises.

The Gambling Commission has also published helpful guidance on how to run a sweepstake without it being considered an illegal lottery under the Gambling Act.