Gambling Commission issues advice to councils on small society lotteries

The Gambling Commission has issued a new advice note for local authorities responsible for licensing small society lotteries.

The note – which can be downloaded here – points out that councils need to remind small society lotteries that employ an external lottery manager (ELM) of the requirement for ELMs to be licensed by the Commission.

An ELM is defined under the Gambling Act 2005 as a person or body that makes arrangements for a lottery on behalf of a society or authority of which they are not a member, officer or employee. The Commission’s website – in a document called Promoting society and local authority lotteries – contains advice on the distinction between ELMs and service providers. There is also a list of licensed ELMs on the site.

ELMs must hold a lottery manager’s licence issued by the Commission if they are to manage a licensed society, 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 that person or body holds a valid lottery manager’s operating licence issued by the Commission,” the guidance says.

Some ELMs are also required to hold personal management licences and must ensure that certain directors and senior managers hold licences.

In addition, ELMs may need a remote gambling licence if they are involved in the promotion of a society lottery where tickets are sold, for example, over the internet or telephone.

“The fact that a society or local authority lottery employs 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 that it is lawful and fully complies with all licence or registration requirements,” the Commission says. “In cases where a licensed ELM is employed, the society or local authority lottery will still need to hold a licence(s) or a registration.”

The guidance recommends that at the time a society applies to a local authority for a registration or the renewal of their society lottery registration, “the local authority should ask the society to confirm whether or not they employ a person or body to promote all or part of their lottery, and if so, whether that person or body is licensed by the Commission as an ELM.

“If that third party person or body is promoting a society lottery without a licence from the Commission, they may be committing an office under section 258 of the Act.”

The guidance also calls on local authorities – where they become aware of a person or body operating as an unlicensed ELM – to inform the Commission and provide details. “The local authority should also inform the society that they may also be committing an offence under the Act by employing an unlicensed entity to promote all or part of its lottery.”

The Commission says that where it becomes aware of an unlicensed ELM, it would “in most cases” investigate the circumstances. “One option open to the Commission is to give the person or body in question the option of either applying for a lottery manager’s operating licence or ceasing its business of promoting lotteries,” it adds.