Angela Whittick of Kirwans is warning companies to ensure that any staff running such schemes are operating within the law – or they may fall foul of the UK Gambling Act.

Says Whittick, ‘Most sweepstakes operate by pulling names out of a hat, and therefore allocating horses by chance. However, the ‘chance’ element means that it becomes a ‘lottery’ under the Gambling Act.’

An arrangement is considered a lottery if:

· There is at least one prize
· People have to pay to participate
· The prizes are allocated by chance.

Whittick says that only charities or local authorities are able to have a lottery licence, and it is a criminal offence to promote a lottery run by any other body.

‘As the definition of ‘promotion’ can cover anything from advertising to selling tickets, there are numerous ways in which well-meaning office workers can unintentionally break the law,’ she adds.

Proceeds that are paid out in prizes, with basic administration expenses deducted, are considered legally acceptable. But any sweepstakes containing an element of charitable giving would automatically fall foul of the law.

‘Many people look forward to their workplace’s annual Grand National sweepstake, without considering for a moment that they could be breaking the law,’ Whittick continues.

‘Unfortunately, unless organisers ensure that they are operating legally, they could end up losing far more than any sweepstake win could give them.’