The Gambling Act 2005 sets out a definition of a lottery and provides that promoting or facilitating a lottery is illegal, unless it falls into one of the two categories of permitted lotteries, either a licence lottery or an exempt lottery. The latter includes Small Society Lotteries

The initial statutory fee for application for registration by a small society and for continuation of registration is £40 and £20, respectively. Registration relates to a calendar year.  

For registration with a Licensing Board the total value of tickets to be put on sale per single lottery must be £20,000 or less, or the aggregate value of tickets to be put on sale for all their lotteries in a calendar year must not exceed £250,000.  If the values exceed either of these values then the Society may require to be licensed with the Gambling Commission instead.  
To be eligible for registration the Society must be established and conducted:

• for charitable purposes;
• for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity;  and
• for any other non-commercial purpose other than that of private gain.

Societies must be able to prove, both upon registration and throughout the currency of the registration, that they are a bona-fide non-commercial society and that the proceeds of any lottery are devoted to those purposes.  

Since the purpose of Society Lotteries is to raise money for non-commercial causes, the Act requires that a minimum of 20% of the money raised by the lottery is channelled to the aims of the Society.  A maximum of 80% of the proceeds may be deducted for expenses and prizes.  

The Society must send returns to the Licence Board with which it is registered, following each lottery held stating:

• The arrangements for the lottery – specifically the date on which the tickets were available for sale, the dates of any draw and the value of prizes, (including any donated prizes and any rollover);
• The total proceeds of the lottery;
• The amounts deducted by the promoters of the lottery in providing prizes, (including prizes in rollovers);
• The amounts deducted by the promoters of the lottery in respect of costs incurred in organising the lottery;
• The amount applied to the purpose for which the promoting society's conducted (which must be at least 20% of the proceeds);  and
• Any expenses incurred in connection with the lottery were not paid for by deduction from the proceeds, including the amount of expenses and the sources from which they were paid.

These returns:
must be sent to the Licensing Board no later than three months after the date of the lottery draw, or in the case of "instant lotteries" (scratch cards) within three months of the last date at which tickets were on sale;  and must be signed (electronic signatures are acceptable if the return is sent electronically) by two members of the society, who must be aged 18 or over, are appointed for the purposes in writing by the society.