Lotteries in the UK are subject to their own set of laws and regulations, separate from other forms of gambling. The National Lottery itself was created by a specific law – the National Lottery etc. Act 1993, which laid the groundwork for a state-franchised lottery that would be run by a licensed operator on behalf of the government. This Act and subsequent amendments set out the rules on how the lottery should operate, how the funds are distributed, and how it is regulated. Notably, the National Lottery is not regulated under the general Gambling Act 2005; it has its own legislation and oversight framework. Initially, an official called the Director General of the National Lottery regulated the lottery. Later, a National Lottery Commission was established to oversee it, and eventually in 2013, regulatory duties were transferred to the UK Gambling Commission. The Gambling Commission now ensures that the lottery is run properly and in accordance with the license conditions and law.

By law, participation in the National Lottery is restricted to those aged 18 or over (this was raised from 16 to 18 in 2021 as a policy to ensure gambling products are adult-only). That means you must be an adult to buy a Lotto ticket or scratchcard. The law also mandates that the lottery returns a certain minimum percentage to good causes and limits the operator’s profit margin. Everything is done under government license: it’s illegal for any other entity to offer a lottery in the UK with high prize thresholds except the National Lottery or authorised charitable lotteries.

Speaking of other lotteries: UK law prohibits unlicensed lotteries outright. You cannot just start a lottery for profit. The only exceptions are primarily society lotteries and small raffles that are for charity or community purposes. Society lotteries (like those run by charities, clubs, or local authorities) are allowed but heavily regulated – they must be nonprofit (all proceeds to charity/good cause minus expenses), and they have strict limits on maximum ticket sales and prizes so they don’t become “rivals” to the National Lottery. For example, a small society lottery might be a local charity raffle which doesn’t exceed £20,000 in ticket sales for a single draw; those can operate under a registration with a local authority rather than a full Gambling Commission license. Larger society lotteries (like some nationwide charity draws or the health lottery or postcode lottery) do require a license from the Gambling Commission, but even they have caps (currently a max prize of £500k per draw, and sales limits per year) to keep them in a different league than the National Lottery’s multi-million pound jackpots. The law basically sets up the National Lottery as a unique national institution – it has an exclusive right to run big-money lotteries for the general public, in exchange for tightly controlled returns to society.

In practical terms, if a company or individual tried to run a lottery without a license (beyond a very small-scale raffle), they would be committing an offence. The Gambling Act 2005 spells out offences for illegal lotteries, and enforcement is taken seriously to prevent fraud and protect consumers. There are also rules that lottery advertising must follow (for example, not targeting underage persons, and including messages about responsible play).

Another legal aspect is that winnings are tax-free for the players in the UK. You don’t pay income tax or capital gains tax on lottery prizes – the government’s share is taken out at the point of ticket purchase (that 12% lottery duty on sales) so winners get their prize in full. However, if you were to gift a lot of your winnings or invest them, normal tax rules on gifts, interest, etc., would then apply.

Finally, the license agreement and law ensure the integrity of the games. There are provisions on how draws must be conducted, security standards, and even how the lottery must be promoted in a socially responsible way. For example, since the lottery’s aim includes funding good causes, the law requires transparency in how much is raised and where it goes, and it prevents the operator from misleading the public.

In short, UK lottery laws carve out a special, tightly regulated space for the National Lottery. They ensure that while people can enjoy Lotto and other games, it’s done under oversight and for the benefit of the public. If someone wants to run a smaller lottery (say a charity fundraiser raffle), there are legal paths to do so, but you’ll never see a rival “national” lottery – the law has essentially granted that privilege to the National Lottery alone, with all the accompanying rules. This legal structure has been credited with maintaining trust in the Lottery: people generally believe the draws are fair and the money is going where it should, because there’s a robust legal framework behind it. And that’s crucial, because without public confidence, a lottery can’t succeed. In the UK’s case, the laws and management have kept that confidence high for decades, and Lotto continues to be a staple pastime with a positive community impact.