Sweepstakes at work – don’t gamble with legal compliance!

A round-robin email inviting people to participate in a workplace sweepstake in the run up to a popular sporting event seems like a bit of innocent fun – no need for an employer to intervene, surely?

In fact, sweepstakes, lotteries and all forms of “betting” in the workplace are regulated by the Gambling Act 2005, so you’d be well-advised to be aware of what it says, to avoid falling foul of its provisions.

Sweepstakes usually involve a person paying into a kitty and selecting a team, horse, or competitor at random; whoever picks the winner gets the prize money. In legal terms, such a sweepstake constitutes a “workplace lottery” and there are restrictions around the promotion and operation of such an event. It will generally be lawful as long as you do not make a profit out of it (even if it is donated to charity), all the tickets are advertised and sold only to your employees in your individual workplace (i.e. not to other companies in the building or across different sites or to families, friends or the general public), and all the proceeds are given as prizes (less any reasonable admin costs). Sweepstakes are not allowed to “roll over” to another event.

If participants are able to choose the team, horse or competitor they wish to support, or predict the result or the score in, say, a football match, this is classed as “betting” and is not generally permitted unless you have a betting license. Some exemptions exist which will allow this kind of sweepstake where all those involved are your employees and the sweepstake is not carried out “in the course of business” i.e. it is incidental to your business activity.

Penalties for transgressions of the Act can include a fine of up to £5,000 and/or imprisonment. For this reason, it’s worth familiarising yourself with the legal position, and conveying the rules in writing to any employees organising a sweepstake at your workplace, so you all stay on the right side of the law.