Territorial limits – vessels and aircraft
Schedule 11: Exempt lotteries
647.This Schedule sets out the requirements that must be complied with in order for a lottery to be classed as “exempt”. Exempt lotteries are those that are permitted to be run without an operating licence. There are four types of exempt lottery: incidental non-commercial lotteries, private lotteries, customer lotteries, and small society lotteries.
648.Part 1 of this Schedule deals with incidental non-commercial lotteries; Part 2 with private lotteries; Part 3 with customer lotteries; and Parts 4 and 5 with small society lotteries and their registration with the local authority. Part 6 sets out certain additional powers of the Secretary of State, and Part 7 is interpretative.
Part 1: Incidental non-commercial lotteries
649.This type of lottery replaces those permitted under section 3 (small lotteries incidental to exempt entertainments) and section 15 (provision of amusements with prizes at exempt entertainments) of the Lotteries and Amusements Act 1976 (c.32). An incidental non-commercial lottery is one that is incidental to a non-commercial event, and in respect of which, all the conditions set out in the rest of this Part are complied with. An event is a non-commercial event if the money raised from the event goes entirely to purposes that are not for private gain (paragraph 2).
650.The conditions that must be complied with are:
The promoters of the lottery cannot deduct money from the proceeds of the lottery, for prizes or other costs, in excess of any sums prescribed by the Secretary of State in regulations;
The lottery must itself be promoted for a purpose other than that of private gain;
The lottery cannot involve a rollover; and
Tickets must be sold at the event location during the event, and the result made public while the event is going on.
Part 2: Private Lotteries
651.There are three types of “private lottery” which qualify as exempt lotteries:
A private society lottery: this must be promoted for, and by, members of a society, although people on the society’s premises (as defined in paragraph 10(1)(b)) may also purchase tickets. The lottery may be promoted for a purpose for which the society is conducted (paragraph 13), and the society can be any group or society, provided it is not established and conducted for purposes connected to gambling;
A work lottery: this must not make any profit (i.e. all the proceeds must be used for prizes or reasonable costs – see paragraph 13), and must be promoted for and by people working on the same premises (as defined in paragraph 11(2)); and
A residents’ lottery: this must not make any profit (i.e. all the proceeds must be used for prizes or reasonable costs), and must be promoted for and by persons who live in a single set of premises (for instance, a hall of residence). The residency requirement can still be satisfied, where the premises are not the sole premises in which a person resides (paragraph 12(2)).
652.All three types of private lottery must comply with the conditions set out in Part 2. These conditions concern:
Advertising (paragraph 14);
Rollovers (paragraph 19); and
Conditions relating to the price and format of lottery tickets (paragraphs 15 to 18).
Part 3: Customer lottery
653.Under Part 3, a customer lottery is a lottery run by occupiers of business premises, who sell tickets only to customers present on their premises. All the conditions in this Part must be satisfied. These include that:
the lottery must be arranged to ensure that no profits are made, i.e. the proceeds must be exhausted entirely in the reasonable expenses of the lottery and in the provision of prizes;
the lottery may only be advertised on the premises on which it is held; and
no ticket may result in the winner receiving a prize worth more than £50 (the Secretary of State can vary this amount by order, under Part 6 of this Schedule).
654.Other conditions prohibit rollover, set rules on the frequency with which customer lotteries can be conducted, and make rules relating to lottery tickets.
655.Under Part 4, a small society lottery is a lottery promoted on behalf of a non-commercial society (as defined in section 19 of the Act), the proceeds of which fall below the thresholds set out in paragraph 31 of this Part. Such a lottery will be exempt only if all relevant conditions set out in Parts 4 and 5 are complied with.
656.Small society lotteries are distinguished from large society lotteries by the amount of the proceeds that they generate. A large society lottery requires an operating licence from the Commission under Part 5 of the Act. A lottery is a large society lottery if its proceeds exceed the thresholds set out in paragraph 31.
657.Where the proceeds fall below these thresholds, the lottery qualifies as a small society lottery, and is regulated by these Parts of Schedule 11. The Secretary of State may change these thresholds in regulations.
658.A small society lottery may be promoted for any of the purposes of the society (paragraph 32). As with large society lotteries, at least 20% of the proceeds must go to a purpose for which the society is conducted (paragraph 33). No single prize may be worth more than the amount set out in paragraph 34. Small society lotteries may have rollovers, although rollovers are only permitted where every lottery that may be affected by the rollover is also a small society lottery and the rollover will not permit any person to win more than the amount in paragraph 34 (paragraphs 34 and 35). This amount may be varied by the Secretary of State in regulations under Part 6.
659.Conditions are also set out in paragraphs 36 and 37 relating to the format and price of tickets. As is the case for large society lotteries, one document can be a ticket for the purpose of entering a number of lotteries, so long as the dates of the draw in those lotteries can be ascertained from the information on the ticket. Tickets for small society lotteries need not be paper documents – they may also be electronic. If a ticket is an electronic ticket, however, it must be capable of being printed, or stored electronically.
660.A society must be registered with a local authority (in England and Wales) or licensing board (in Scotland), in accordance with Part 5 of the Schedule while any small society lottery is being promoted.
661.The society must send to the local authority with which it is registered, a statement of the matters listed in paragraph 39(2). This includes information as to:
The arrangements for the lottery (dates, prizes, proceeds etc.);
Amounts deducted by the promoters for prizes and costs;
Whether any other costs were paid, other than from the proceeds of the lottery.
662.Two members of the society, or its governing body, must sign a statement sent to the local authority. If a local authority receives a statement, and they think that the lottery was, in fact, a large lottery, they must notify the Commission.
663.The provisions for registration, in Part 5, set out the mechanisms for application, registration, refusal, revocation, cancellation and appeal against decisions made in relation to the registration of a small society lottery. Appeal is to the Magistrates Court and, in Scotland, to the Sheriff. There is an annual registration fee of an amount to be prescribed by the Secretary of State and Scottish Ministers in regulations. Local authorities and licensing boards must keep a register of all societies registered under this Part, and must notify the Commission when they register any society.
Part 6: Powers to impose additional restrictions
664.Part 6 sets out the powers for the Secretary of State to impose additional restrictions, by regulations, on the exempt lotteries described in this Part:
requiring that tickets are distributed by hand rather than post; and
relating to the use of rollover arrangements.
665.This Part also gives the Secretary of State the power to make orders relating to classes of lottery with the following effect:
imposing further conditions on exempt lotteries (in particular in relation to those matters listed in paragraph 59(2));
restricting the extent to which a person can rely on the exemptions set out in Schedule 11. Such an order may, in particular, further restrict the number of exempt lotteries that may be promoted in any period or the minimum interval between two exempt lotteries promoted on behalf of any person.
666.Before exercising these powers, the Secretary of State must consult the Commission.
667.The Secretary of State may also, by order, vary a monetary amount or a percentage set out in this Schedule.
Part 7: General
668.Part 7 explains terms and phrases used in Schedule 11. It also clarifies that, other than in respect of private lotteries or customer lotteries, the provisions of the Schedule apply to activities on a vessel.
Part 12: Clubs, Pubs, Fairs, &C.
669.This Part provides certain gaming allowances, and additional authorisation procedures for gaming and gaming machines for:
Miners’ welfare institutes;
Alcohol licensed premises; and
670.Under the Gaming Act 1968 these various associations, premises and entities are afforded particular gaming entitlements, either as of right, or with express permission. Once commenced, this Act repeals those provisions of the 1968 Act, and this Part provides a replacement regime. This Part does not provide any entitlements to conduct betting or lotteries, only gaming and the use of gaming machines.
671.Part 10 of the Act contains power for the categorisation of gaming machines, which is relevant to this Part. Part 18 of the Act contains sections which make provision for determining the value of a prize, and defining participation fee and stake.
672.Where a reference is made in this Part to a Commission code of practice, it means a statutory code of practice, issued under the Commission’s powers in Part 2 of the Act.
673.This Part contains powers for Scottish Ministers to make regulations about the procedural requirements for club gaming permits and club gaming machine permits and licensed premises gaming machine permits in Scotland.
Sections 266 to 268: Definitions of eligible clubs
674.There are three categories of eligible club: members’ clubs, commercial clubs and miners’ welfare institutes. To take advantage of the various gaming rights in Part 12 a club has to bring itself within one of these categories (although not all gaming rights are equally available to all three categories of club).
675.Members’ clubs must have at least 25 members and be established and conducted wholly or mainly for purposes other than gaming (unless the gaming is of a prescribed kind). They are to be established and conducted for the benefit of their members. They are also to be established with the intention of operating on an ongoing basis, and not temporarily. Examples of such clubs would include local political associations, working men’s clubs or branches of the Royal British Legion.
676.Subsection (2) permits the Secretary of State to prescribe particular kinds of gaming. It is proposed that bridge and whist be so prescribed. This allows members’ clubs established for the purposes of providing such gaming to take advantage of rights under Part 12, notwithstanding the restriction in subsection (1)(a). This maintains the position under the Gaming Act 1968. See also the provision for exempt gaming under section 269(1)(c).
677.Commercial clubs are subject to the same conditions as members’ clubs, except that members’ clubs must not operate as a commercial enterprise which benefits a class of people different to the members. Commercial clubs, on the other hand, can. These clubs can also be known as proprietary clubs. An example of a commercial club would be a snooker club. Like members’ clubs, commercial clubs may also be gaming clubs, provided the gaming is of a type prescribed in regulations under subsection (2), although this proviso does not apply to exempt gaming under section 269.
678.The definition of miners’ welfare institutes has been amended from that contained in the Gaming Act 1968. Under Part 12 miners’ welfare institutes are associations established for social or recreational purposes, where the association is either managed by a group of miners’ representatives or uses premises regulated under a charitable trust, where the trust has, at some time, received funds from one of a number of mining related organisations. The definition of “miners’ representative” has been revised to take account of changes in mining communities and ex-mining communities. Furthermore, the alternative limb for qualification as a miners’ welfare institute has been amended to allow for the broader social aims that institutes in ex-mining areas now promote. The definition in section 268 replaces that in the Gaming Act 1968.
Sections 269 & 270: Exempt gaming
679.This section permits members’ clubs, commercial clubs and miners’ welfare institutes to provide certain facilities for gaming without the need for any express authorisation. In order to qualify for this exemption the gaming must meet a number of conditions:
It must be equal chance gaming, as defined in Part 1 of the Act;
Stakes and prizes must be in accordance with any rules or limits prescribed in regulations;
The club must not deduct any amounts from sums staked or won in the gaming;
Any charge for participation (which is broadly defined) must not exceed amounts prescribed in regulations (and see section 344);
The games played may only take place on one set of premises meaning there may not be any linking of games between premises; and
People may only participate in the gaming if they have been a member of the club (or applied or were nominated for membership) at least 48 hours before playing, or are the genuine guests of such a person (but this does not apply to commercial clubs).
680.These conditions are similar to those set out in section 40 of the 1968 Act, which the Act repeals, with the exception of the restriction on linking games and the addition of a power to prescribe maximum stakes and prizes, which are new. The gaming allowances under section 269 may be used by any members’ or commercial club that is permanent and has at least 25 members, even if it is established for gaming. There is no requirement for the gaming to be of a prescribed kind (see section 269(1)(c) and (d)).
681.Under section 270, subsections (2) and (4), different requirements about the limits on stakes, prizes, and participation fees may be set for different types of club or institute, for different types of game, and for different types of fee.
Sections 271 & 272: Club gaming permit
682.Members’ clubs (but not commercial clubs) and miners’ welfare institutes may apply for a club gaming permit from a licensing authority to authorise the provision of games of chance and gaming machines on premises from which the club operates. This permit allows clubs and institutes to offer gaming facilities, in addition to those available under the exempt gaming allowances. Schedule 12 sets out the procedure and rules for this permit.
683.The club gaming permit will authorise the provision of up to 3 gaming machines in categories B, C or D (but no more than 3 machines in total). The permit is subject to the condition that no person under 18 shall use a Category B or C machine, and the holder of the permit must comply with a Commission code of practice about the location and operation of gaming machines.
684.The club gaming permit will also authorise additional gaming facilities to be provided. This gaming falls into two types:
Equal chance gaming. This is equivalent to that authorised under the exempt gaming allowances in sections 269 and 270, but without any prescribed limits on maximum stakes or prizes. The other conditions set for exempt gaming apply equally to this entitlement; and
Such games of chance as are prescribed in regulations. This provision allows the Secretary of State to authorise particular games involving a bank or unequal chance games to be played under the permit. Under the Gaming Act 1968 pontoon and chemin de fer were permitted. This gaming is subject to a number of conditions set out in section 217(4), and also rules which the Secretary of State may prescribe.
685.The Secretary of State may make regulations which set different maximum participation fees for exempt gaming and gaming authorised by a club gaming permit. By this means a club which holds a club gaming permit can be permitted to make different charges for equal chance gaming, to a club which relies solely on the exempt gaming provisions in section 269.
Section 273: Club machine permit
686.Under this section a club machine permit is available to a members’ club, miners’ welfare institute or a commercial club. This type of permit authorises the holder to provide up to 3 gaming machines in Category B, C or D (but no more than 3 machines in total) on premises from which the club operates. It does not authorise the provision of any other type of facilities for gaming. Three conditions are automatically attached to a club machine permit. These relate to prior membership for use of the machines (but not for a commercial club), restrictions on giving children and young people access to Category C or B machines; and requiring compliance with Commission codes of practice about the location and operation of machines.
687.Schedule 12 sets out the procedure in relation to an application for a club machine permit, and the rules which apply to its maintenance and validity.
Section 274: Procedure
688.Schedule 12 contains the detailed rules for the two types of club permit, in relation to England and Wales. In relation to Scotland, different procedures to those in Schedule 12 will apply if Scottish Ministers exercise their powers under section 285. These powers enable different procedural rules to be set for clubs or institutes holding a certificate of registration under the Licensing (Scotland) Act 1976, or for clubs or institutes of such other type as may be specified in the regulations.