The United Kingdom. The land of great history, stories, and beautiful countryside. The United Kingdom is an island country of Europe consisting of England, Wales, and Scotland and parts of Ireland. Its capital London is one of the biggest cities in the world and is a leading commercial, financial and cultural centers. The city has people traveling there for education and work from all over the world. History shows evidence of the first group of modern people having lived in England. Historically, the different countries were at war, around the 1900s they came together under The United Kingdom of Great Britain and Northern Island.
Although there were lotteries seen in the UK in different forms throughout history and stories, the first official lottery can be traced back to only a few years ago. The first “official” lottery draw was in 1994. Now, one of the biggest lotteries sold is the National lotteries that have been running for over two decades. Keep reading to explore the story of lotteries and everything you need to know now about lotteries in the United Kingdom.
The history of
in UK lottery
Lotteries have had fans since the classical times in the UK. This has been documented and recorded in stories and history. But the significant changes happened in the 16th century. The countries in Europe introduced lotteries as a means to raise money and funds for wars and other projects of national importance. The very first lottery documented in Britain commissioned by Queen Elizabeth I in 1566. The aim of this lottery was to raise funds for the “reparation of the havens and strengths of the Realm and towards such other public good works” – the money was essentially used to expand the Royal navy and invest in establishing and developing ports to compete with countries in export markets and colonies. This lottery was only for selected parts of the society. This has been intentional in the lottery history of other countries. Whereas with the UK lotteries, this was not completely intentional. Because the reason to set up lotteries was of high importance and competition for exports was high at the time, the lottery tickets were set a price too costly (10 shillings per ticket with the jackpot prize set at 5000) for everyday citizens to purchase. Among the set 5000, 3000 was paid in cash, 700 was paid in plates and the balance of the prize was paid in tapestries, covertures, and high-quality linen cloth. This practice of dividing and giving the prize is followed till date. Except that the jackpot prize money is paid in annual increments in the modern lotteries. In the early lotteries, every person who bought a ticket won some prize or the other. This means that the organizers of the lotteries made no profits. But the winning of the first lottery was only distributed in the year 1569. That is, three years post the sales of the lotteries. Thus, this money was used for the required cause giving the nation (the crown at the time) three years to build the necessary funds to distribute money to the buyers. Not only that, anyone who bought the lottery tickets was absolved of any crimes they may have committed unless it was a murder, felony, piracy or treason to the crown.
After the prizes were distributed for the winners of the first lottery, the rights to sell lottery tickets were handed over to various brokers. The brokers acted as middlemen. The tickets were sold to the people by public agents hired by the different brokers. The lottery money raised through the Virginia Company of London was used to establish and build, James town, the first western settlement of the UK. This settlement later became the United States of America. The large part of the Victorian era did not allow lotteries. Eventually, in order to bring order and control to the chaotic problems created because of unlicensed gambling, the betting and lotteries Act of 1934 was introduced.
The first draw of the National Lottery; which is the current lottery, has been functioning since 1994 run by the Camelot Group Ltd. The way that the national lottery operated has changed since its inception in the 1500s. Everyone is able to purchase and participate in the lotteries today. It’s not just people from the UK, but people from all over the world try to participate in the national lotteries. And those purchasing lottery tickets with a criminal record are no longer pardoned. In the year 1997, the weekly Wednesday draws was introduced and happens till today. In February 2004, one of the biggest known games, Euromillions was held for players in the UK, France, and Spain.
Today, the lottery runs for different causes that the British government sets out as important. Since the establishment of the national lottery more than 30 billion pounds, i.e. 50 billion US dollars has been raised for good causes.
The lottery today
The National Lottery is not similar to lotteries offered in the other countries. The National Lottery is still run by Camelot and governed by the Gambling Commission. The National Lottery redesigned its brand and was renamed to Lotto and the National Lottery Extra was renamed to Lotto Extra in 2002. These together are known as the National Lottery today. In 2009, Camelot replaced the number drawing machines replacing them with newer models but still using the names from the previous models – Arthur, Merlin, Guinevere, and Lancelot. During the time, the Thunderball machine was also introduced.
There are not as many players in the national lotteries as the others and so the jackpot money also does not get as big the as the Powerball or Mega millions of the United States. But because of the low number of players, the chances of winning the UK lotteries is also much higher. Data shows that the probability of winning the national lottery is 1 in 14 million. Although this does not sound like a high probability, the chances of winning in the American Mega Millions is 1 in 259 million. So, if you are a resident of the UK and interested in purchasing a lottery ticket, go for it!
As hinted above, UK also has a set of rules of regulations pertaining to who can participate in the national lottery. Keep reading to find out more.
For the buyers to know
There are many ways that an interested player can participate in the UK national lotteries. The national lottery is a fun game that a lot of people in the UK participate. All of the UK lottery games can be bought online via relevant and authorized websites. There are also websites that sell UK lottery tickets online for players to buy. But, the first thing to note, is that if a player wishes to participate in the national lottery, they must be a resident of the United Kingdom to be able to claim any prize. It does not matter if the winner is a foreign citizen or an immigrant, as long as they are legal residents of the UK and the Isle of Man, they can play and win the lotteries. The lottery operator, Camelot introduced the rule that sated that the buyer must be physically present in the United Kingdom or the Isle of Man for the lottery ticket to be valid. This rule was introduced in 2010 to avoid confusions stemming for players and winners hailing from countries where playing lotteries or foreign lotteries was not allowed. This applies to subscriptions as well. If lottery subscriptions have been set up, then only tickets “purchased” while the player was in the UK would be valid. Even a ticket purchased during a holiday me be considered invalid and the prize money cannot be claimed.
The legalities of the lotteries
The national lottery is at the moment regulated by the Gambling Commission. Until 1st April 1999, the regulators of the lotteries was the Office if National Lottery. Then, the National Lottery Commission took over and regulated the lotteries until 1st October 2013. This commission was a public body that worked under the Department of Culture, Media and Sports. The first lottery was set up under the National Lottery Act of 1993. This was reformed in the National Lottery Act of 1998. Significant changes to the lotteries came when the Act was once again reformed to be the National Lottery Act of 2006. This act of 2006 contained details of licensing required for authorized sales agents to sell lotteries. Finally, in 2013, the Gambling Commission took over with detailed amendment and regulation to the lotteries law in the UK.
The Gambling Commission of UK is an executive non-departmental public body that is in charge of regulating and supervising lotteries and gambling in the United Kingdom and the Isle of Man sponsored by the Department of Culture, Media, and Sport. This does not apply to the Northern Ireland though. Local authorities from England, Wales and Scotland make decisions with regard to the National Lottery and authorizing the sales agents to sell lottery tickets. It is also responsible for regulating online lotteries, and betting through any other mode of communication on the territory of Britain. The Gambling Commission was established in the year 2005 under the Gambling Act. In 2007, the commission took on a broader role by taking over the responsibilities of governing all the arcades, betting, bingo, casinos, slot machines and lotteries. Spread betting is not governed by the commission. The stated mission of the commission is “to keep crime out of gambling, to ensure that gambling is conducted fairly and openly, and to protect children and vulnerable people”.
As of 1st October 2013, The National Lottery Commission became a part of the Gambling Commission. Thus, now the Gambling commission oversees the United Kingdom National Lottery.
Types of lotteries
According to the Gambling Commission lotteries can be recognized to be of four types.
- Society lotteries: These are lotteries that aim at promoting the benefit or cause of a non-commercial society. A society lottery is established and run mainly for charity and enabling and building interest in sports, culture, and arts. No private profits are made via this lottery.
- Local Authority Lotteries: These lotteries use the net proceeds for any purpose for which the lottery has the power to incur expenditure.
- Exempt Lotteries: These type of lotteries do not require to be licensed from the Gambling Commission. They are only required to register with a local authority. These lotteries are also conducted for charity,
fund raisingfor a cause. Etc. Other Exempt lotteries include –
- Incidental non-commercial lotteries
- Private Society Lotteries
- Work Lotteries
- Customer Lotteries
- The National Lottery: This is the lottery we have been talking about for the most part. It is run by Camelot and regulated by the National Lottery Commission under the Gambling Commission. Lotteries already regulated by the National Lottery Commission will not require a Gambling Commission license.
Where to purchase the tickets
The UK lottery tickets can be bought online or on-site from any approved sales agent. There are over 30,000 lottery terminals in the UK for where tickets can be bought directly. The online sales are strictly restricted to residents from the UK and the Isle of Man. Tickets are non-transferrable. Therefore, it is not possible for someone else to purchase the ticket on the buyer’s behalf. And finally, as mentioned above – It should also be noted that winners are required to be physically present to collect any prize money.
Age Limit for purchasing tickets
Residents from the UK and the Isle of Man must be 16 years old and above the age of 16 to purchase lottery tickets online and on-site. This also applies to team members participating in a group or a syndicate. Every participant from the syndicate must be 16 years of age or above. Lottery tickets given as gifts to children below 16 will also not be considered valid.
Paying for the tickets
The lottery tickets are sold both online and on-site. For on-site sales, the buyers have the options of purchasing with cash or debit card. Creating an account required players to share with the website their debit card details. Purchase of tickets is also done via debit cards once the card is registered with the website. Although, there is no specified rule that = credit cards are not allowed, is it advisable that the buyer does not use a credit card to purchase lottery tickets. It is difficult to keep track of the spending amounts if a credit card is used. This puts the buyers and their families at unwanted risk. It is also not clearly mentioned if e-wallets can be used for the purchase of lottery tickets. Other that the Pingit app that has collaborated with Camelot, there does not appear to be any other e-wallet or mobile applications that are used to play the lotteries in the UK.
Ways to play and check for the lottery
There are different ways among which a player may choose to play the lotteries and to check for the winning draws in the United Kingdom. For those who are choosing to play the games online, there are two ways to go about this.
- Direct Debit: This refers to players creating a lotto account by signing up using the bank account details and mobile numbers. The account will notify the winners via their registered e-mail Ids. This is available only for the Lotto and the Thurderball.
- Loaded Account: Pre-set amounts of money are transferred to the account for playing. The national lottery again notifies the winners via registered e-mail addresses. At the moment, for this account, the minimum amount to be loaded is 10 pounds.
- Get a subscription: The Camelot website offers subscription offers for account holders. Here, players can purchase subscriptions and pre-select numbers for their tickets.
For those who do not want to create online accounts, there are options too:
- Barclays Pingit: Since the July of 2015, Barclays has introduced purchase of tickets for the National Lottery and the Euromillions in their app Pingit. Small prize monies are paid directly to the winner’s Pingit account.
- The Television: One of the easiest and oldest ways to follow up on lottery draws is the television. The draws happen in slots on the BBC channels. The buyers are advised to check which channels the broadcast happens.
The easy accessibility to lottery tickets online makes it easier for unauthorized agents to sell tickets for the games online. It is very important that the buyers make sure that they are using a legitimate and valid website. Else, this could put the buyers at financial risk and risk of loss of personal information. In a recent case on 16th March 2018, Camelot sent out a warning to over 10 million players to change their passwords for their online accounts. More than 150 customers were exposed to cyber-attacks. The company has said that customers did not face financial loss during this process. There are many such scams that occur that the players should be aware of and they should refrain from participating for a while should news about any scams reach their years.
For the winners to know
As discussed above, the residents of the United Kingdom and the island of the Isle of Man are very lucky. This is because the probability of winning a lottery in the UK is quite high (since participants are limited to the United Kingdom). Especially compared to the chances in the USA games such as Powerball or Megamillions. Here are some things that the winners will have to know once the winning numbers have been drawn.
Claiming the Prize
All winners must fill out and submit a prize claim form if they have won more than 50,000 pounds. The winner should also note that showcasing a screen print of the winning play, a play slip, and a purchase confirmation will not be accepted as proof of entitlement.
For all online prizes other than Direct Debit and Pingit prizes, the winners should know the following –
- Prizes up to 500 pounds will be credited directly to the National Lottery Account.
- Prizes between 500 and 30,000 pounds, the winner will have to confirm before 11 pm on the last date of the claiming period. This amount will be sent to the registered debit card of the National Lottery Account.
- Prizes between 30,000 and 50,000 pounds, winners will have to contact the customer care team and claim the prize during operating hours. This sum will be paid by check.
- For Prizes above 50,000 pounds, the winner must claim the prize in person during the claiming period. Again, the customer care team will help and the payment will be done via check.
For any prizes won in kind (such as a car), the claiming procedures will be shared with the player at the time of participation.
For Direct Debit and Pingit Prizes:
- Prizes up to 50,000 pounds will be credited to the bank or building society account from which the Direct Debit is taken or credited to the Pingit Account.
- Any prizes above 50,000 pounds, the winner will have to contact customer care team who will arrange a way for the prize to be claimed in person during normal operating hours.
- If the prize is in kind, as mentioned above, the claiming rules will be shared with the player at the time of participation.
The National Lottery rule for claiming is one of the best parts about the UK National Lottery. In the UK, if winners would like to opt for complete and total anonymity, the National Lottery does reveal any information. Not even information related to the area or city from which the winner is from. In fact, 85 percent of the winners from the UK stay anonymous. Even in multi-national games such as the Euro millions, the final say remains with the nation’s lottery authority. And the National Lottery Commission is all for protecting the identities of the winners. They may announcements are made without the permission of the winner is if the money goes unclaimed beyond a certain period and the expiration period was nearing. This is a great advantage that residents of the UK have. There are always numerous cases registered and documented that show the dangers that the winners are exposed to because their information has been made public. It even results in robbery, assault, and homicide.
The National Lottery Commission states that winning prize monies must be collected within 180 days from the day the draw takes place. The ticket will be deemed invalid and valid as of the 181st day and the winners will not be given any share of the prize money. The unclaimed money is returned to the funds and will be used for a good cause.
Taxes on the Prize
As per the lotteries laws in the United Kingdom, no taxes have to be paid on lottery winnings. But some of the money from the prize does go to HMRC. These are pointers that the winners should keep in mind. The HMRC states under its Capital Gains on Taxes that any income made via betting, lottery or pools winnings are tax exempt. Even those playing the games of another country from the UK will not be liable to taxes as per the law of that country by the HMRC. 100% of the winnings from the games can be taken home.
But this does not mean that 100% of the money remains with the winner. When the money is transferred to a bank, then like for any other large deposit, interest will have to be paid. A savings account allows depositing 20,000 pounds per annum. The sum above the 20,000 will be subject to Capital gains tax.
In the UK, one of the biggest issues that the lottery winners deal with is the inheritance. The problem arises when decisions have to be made on what happens to the prize money once the winner passes away. Known as the “death tax”, the inheritance tax is set at 40% for any sum above 325,000 pounds. This has an immense effect on the lottery money that winners will be able to pass on to their heirs. Jackpot winnings tend to be in millions of pounds, and the inheritance tax could take away a big piece of this money thus restricting the sum of money the winner can leave for their heirs. There are also different rules to this based on the marital status of the winner.
Sharing lottery with Family members
When winners of the lotteries are older, they tend to save up the money for their families. But this causes more trouble than one can imagine. Any gifts received from a winner up to seven years before the death of the winner is considered to be inheritance. Therefore, although the winners will not have to pay any taxes, the gifts that they have given to their families will face 40% in inheritance taxes. In 2006, one such winner Bob Bradley of Wales gave most of his money away as charity and used the rest of the money to purchase gifts for his family. One year later, he passed away. Now, the problem was that the unaware family members were facing 40% in taxes that they have to pay. Therefore, winners should get the help of an attorney and plan how to utilize their winnings in a smart and effective manner.
For the sellers to know
As per the Gambling Act, only authorized sales agents can sell lottery tickets and run betting units. In order to sell lottery tickets on the premises (that is on-site), the seller will have to get a premises license from the required authority. Before getting a premises license, the seller should also have applied for a license with the gambling commission. If such premises is yet to be built or finalized, the seller must apply for a provisional statement from a relevant local authority. On the other hand, if the seller already has a valid operating license that already allows sales of lottery tickets, then only the premises license is required. Each area may have different requirement to be met for gambling, betting and sale of lottery tickets. It is advised that the seller does a check of this list with the relevant local licensing authority. The cost and fees to set up a separate on-site operation can be checked on the gambling commission’s website. It may not be the same throughout. After applying, the seller will have to alert the following departments within seven days of application –
- The Gambling Commission
- HM Revenue and Customs
- The Local Police Chief
- The Local Fire and Rescue Service
- The Local Environmental Health Department
- The Local Planning Authority
- The Local Licensing authority
- Child protection service
The sales agent will also have to make a public announcement once within the ten days applying for license. This can be done via the following –
- Publishing in a local newspaper or newsletter
- Posting notice in a visible place outside the suggested premises.
Advertising lottery online may be illegal
As per the Gambling Commission and the National Lottery Commission, false advertising and promoting of lotteries online is a crime and is punishable by law. A conviction can lead to imprisonment. Lotteries can be promoted only if they are for a good cause. They cannot be promoted for commercial or personal gain. The sellers should ensure that they operate with a license. Most sales agents do not realize if they have the correct legal documents to be selling lottery tickets. It is advisable that they refer to the national commission or the gambling commission’s online website to understand relevant processes and meet them as suggested. The sellers can also talk to local licensing authorities who can walk them through the process. No sales should take place unless all relevant legal requirements are met.
With no-tax prizes, high probability of winning and a secure Lottery Commission, The United Kingdom lotteries do well compared to most lotteries in the world. The buyers, winners, and sellers will have to read up on all that is to know about the online lotteries in the United Kingdom and the Island of the Isle of Man before participating and engaging in the lotteries. If they do, the lotteries can be a fun experience that may just bring about a life-changing event by making a player a winner.