By Max Clarke

As the nation prepares for the Grand National, many workplaces across the country will be setting up sweepstakes in which horses, often drawn at random from a hat, are allocated to staff members in exchange for a small fee. The pool of money then goes to the staff member with the winning horse.

Many bosses will be unaware that such practice is in fact illegal as it is classified under the Gambling Act 2005 as a lottery.

While private lotteries are legitimate, encouraging members of a workplace to participate would require obtaining a license from the Gambling Commission.

Commercial solicitor James Corlett, speaking to shropshirelive.com, explains: “Most staff will be allocated horses purely by chance, as this is the only ‘fair’ way of doing it. This is likely, however, to fall into the definition of a ‘lottery’ under the Gambling Act.

“Grand National sweepstakes may seem like a bit of harmless fun, but the reality is that unless they are carefully organised, there is a distinct possibility that a business could find itself in hot water.”

Specifically relating to ‘workplace lotteries’, the 2005 Gambling Act, available to view online at gamblingcommission.gov.uk, states:

These can only be run and played by colleagues at a particular place of work, but this type of lottery cannot make a profit so is unsuitable for fundraising. You can run a lottery for your employees at a single set of work premises without an operating licence from the Gambling Commission, unless your workplace is subject to a gambling premises licence. All of the proceeds from ticket sales must be spent on prizes or expenses.