Running a prize draw at work
Staff draws come in two kinds and the rules are completely different. If nobody pays to enter, there is almost nothing to think about. The moment colleagues are handing over a fiver for a strip of tickets, you are running a lottery, and there is a specific exemption for doing that at work with conditions most guides get wrong.
Nobody pays: the easy case
A free staff prize draw, whether it is a Christmas giveaway, a thank you after a hard quarter or a prize for filling in the engagement survey, is a free prize draw. It sits outside the Gambling Act, so there is no licence, no registration and no council form.
What is left is fairness and appearances, which at work matter more than they do at a fete. People notice who wins things. Say the rules before entries open, pick with something genuinely random rather than by eye, and show the result.
People pay: the work lottery exemption
The Gambling Act 2005 has an exempt category built for exactly this, called a work lottery. It needs no registration and no licence, but it is narrower than people assume.
A work lottery
- The people running it work on a single set of premises, and every person sold a ticket works on those same premises.
- It must either be organised so that no profit is made at all, with everything going on prizes and reasonable costs, or be promoted wholly for a purpose other than private gain, which is how a charity raffle at work qualifies.
- Tickets are not transferable. A ticket belongs to the person who bought it.
- It may not be advertised anywhere except the work premises, so no posting it on the company's public social accounts.
If your team is spread out and you still want to charge, the options are to make the draw free to enter, or to have a registered charity run it as a small society lottery in its own name, which is covered in the guide to the rules.
The tax question nobody asks until afterwards
A prize given by an employer to an employee is not automatically tax free, and this is worth a five minute conversation with payroll before the draw rather than a surprise in January.
- A non-cash gift costing £50 or lesscan fall under the trivial benefits exemption. It must not be cash or a cash voucher, must not be a reward for work or performance, and must not be written into anybody's contract.
- Anything larger, or anything that reads as a reward for performance, is generally taxable. Employers commonly settle it through a PAYE Settlement Agreement so the winner does not receive a tax bill for a hamper.
- Prizes donated by a supplier or a third party rather than the employer are a different case again. Ask before assuming.
None of that is a reason not to run a draw. It is a reason to know which bracket your prizes sit in before you announce them.
Making it feel fair on a Friday afternoon
- Publish the rules before entries open. Who can enter, the closing date, how many prizes, how winners are picked, how prizes are allocated.
- Include everybody who is eligible. Part-timers, people on shift, anyone on leave. A draw that quietly excludes the night shift causes more damage than it is worth.
- Do not let the organiser win. Or if they are in it, have somebody else run the draw. This is the objection people will not raise out loud.
- Draw where people can see it. On a screen in the office or shared on a call. The visible process is most of the reassurance.
- Post the result. Names and prizes, in the same place you announced the draw.
When there are lots of prizes
Christmas draws are usually prize-rich: fifteen things donated by suppliers, fifteen winners, and one person from the social committee trying to work out who gets the wine and who gets the mug. Assigning them by hand is where the goodwill leaks out, because somebody always ends up with the thing nobody wanted.
Drawing prize by prize in front of the room is the traditional fix and works well when everyone is there. For a team spread over shifts or sites, the alternative is to draw the winners, then let each winner pick from a live list of what is left, first come first served, so the same prize cannot be promised twice and nobody has to chase anybody. The full set of options is in multiple winners, multiple prizes.
Where Prize Desk fits
Prize Desk never takes money, so it does not affect whether your draw is free or a work lottery. It gives you one link so colleagues enter themselves, draws the winners with a cryptographic random number generator in front of whoever is watching, and can issue a certificate recording how the draw was made. Where there are several prizes, each winner gets a private link and picks their own. It is free and needs no account.
Sources, checked for this page: Schedule 11 paragraph 11 of the Gambling Act 2005 for what makes a lottery a work lottery, paragraph 13 for the profit condition, and gov.uk on trivial benefits for the £50 exemption and its conditions.