Charitable gaming

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Charity gambling is a "form of incentivized giving"[1] where a charity (or a group of charities), rather than a municipality or private casino, oversees gambling activities such as bingo, roulette, lottery, and slot machines and uses the proceeds to further its charitable aims.

Characteristics

Charity lotteries tend to:[2]

  • Be privately operated without political interference
  • Not retain private profits (i.e., the primary aim is to raise funds for the charity)
  • Donate "a substantial part" of the funds to the charity (according to the Association of Charity Lotteries in the European Union, "ideally, the operational costs of the lottery do not exceed 20% of turnover, with the remaining 80% equally divided between donations to charities (40%) and prize money (40%)")[2]
  • Support a charity's overall objectives, rather than specific projects or activities
  • Provide long-term funding prospects as a "reliable partner"

The Association of Charity Lotteries in Europe, founded in 2007, promotes this model and has estimated that allowing private charity lotteries to operate across Europe could raise substantial additional funds for civil society organisations.[3]

As a form of incentivized giving, supporters are rewarded, which makes it more likely to draw donations from those who may not have otherwise.[4] Furthermore, charities can add these donators to their database and reach out to them in other fundraising capacities.[5] Philanthropists like this method of fundraising because it is a "predictable way of generating income".[6]

In the UK

In the UK, lotteries are permitted provided they raise money for charities. By law, the charity must receive at least 20% of the value of the lottery ticket. These lotteries are sold in competition with the National Lottery but operate under tighter regulations. For example, a lottery run for charity can have a maximum jackpot of £200,000 whereas the National Lottery has no maximum.[7] Charity lotteries in Britain are regulated by the Gambling Commission, with large society lotteries requiring an operating licence and smaller ones registering with the local authority.[8] Society lotteries generated more than £1 billion in gross gambling yield in 2024/25, of which about £484.6 million went to good causes.[9][10] Charities running lotteries and raffles are also expected to follow guidance issued by the Fundraising Regulator.[11]

The Gambling Act 2005 permitted the sale of charity lottery tickets through vending machines. Following the Act, companies including Gamestec Plc and Tabboxx (UK) Ltd introduced lottery vending machines in pubs and other venues across the United Kingdom. In 2012, Tabboxx partnered with the Dame Kelly Holmes Legacy Trust to launch a lottery aimed at raising funds for sports programmes for disadvantaged young people.[12]

Australia

In Australia, regulations relating to charity fund-raising varies among the different states and territories,[13] for example, in South Australia, Consumer and Business Services administers the state Lottery and Gaming Act 1936, which regulates lotteries and bingo run by charities.[14] Under that Act, fundraiser lotteries above a set prize threshold and bingo sessions above a low proceeds limit require authorisation, while smaller activities may be exempt.[15][16]

References

  1. Barykin, Sergey Evgenievich; et al. (2022). "Prospects for using charity lotteries in social marketing". F1000Research. 11: 664. doi:10.12688/f1000research.114652.2. PMC 9350437. PMID 35967973.
  2. "Definition of a charity lottery". Association of Charity Lotteries in the European Union. Archived from the original on 2014-12-31. Retrieved 2 October 2014.
  3. "Association of Charity Lotteries in the European Union: submission" (PDF). Norwegian Ministry of Culture. Retrieved 1 June 2026.
  4. Landry, Craig E.; Lange, Andreas (2006). "Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment". The Quarterly Journal of Economics. 121 (2): 747–782. Bibcode:2006QJEco.121..747L. doi:10.1162/qjec.2006.121.2.747.
  5. Carpenter, Jeffrey (2017). "Using raffles to fund public goods: Lessons from a field experiment". Journal of Public Economics. 150: 30–38. doi:10.1016/j.jpubeco.2017.03.001.
  6. Bilton, Lorraine (9 October 2013). "How to make your charity a lottery winner". The Guardian.
  7. "Charity lotteries in the EU member states: United Kingdom" (PDF). Association of Charity Lotteries in the European Union. Archived from the original (PDF) on 2014-10-06. Retrieved 2 October 2014.
  8. "Promoting society and local authority lotteries". Gambling Commission. 2 September 2013. Retrieved 1 June 2026.
  9. "The potential merits of removing the caps on charity lottery fundraising". House of Commons Library. 2023. Retrieved 1 June 2026.
  10. Killeen, Patrick (26 May 2026). "Gambling Commission warns of tougher rules as society lotteries hit £1bn GGR". "ZonderCruksNews". Retrieved 1 June 2026.
  11. "Lotteries and raffles". Fundraising Regulator. Retrieved 1 June 2026.
  12. "London 2012 legacy - what can we learn 10 years on?". BBC Sport. Retrieved 2023-03-08.
  13. "State, territory and local government requirements". Australian Taxation Office. 27 June 2018. Retrieved 15 May 2021.
  14. "Fundraising in South Australia". Australian Charities and Not-for-profits Commission. Archived from the original on 2021-05-15.
  15. "Lottery and Gaming Act 1936". South Australian Legislation. 22 November 2021. Retrieved 1 June 2026.
  16. "Lotteries". Law Handbook SA. Legal Services Commission of South Australia. Retrieved 1 June 2026.

See also