Is your World Cup sweepstake illegal?

With the football tournament now in full swing, People Management asks employment lawyers if office lotteries can land HR in legal hot water

Credit: Buda Mendes/Getty Images

Following the start of the World Cup in Qatar on Sunday and kick-off times taking place during office hours, escalating employee excitement is inevitable. Many workplaces may have started a sweepstake to help staff bonding, as is tradition during major sporting events – but employment lawyers have warned that, this year, your jovial sweepstakes might be breaking the law.

Pre-Covid, a sweepstake required very little thought as homeworking was a rarely seen luxury. But in the new post-pandemic world of work, remote working employees who enter your sweepstake could be breaking the law, cautions Richard Bradley, associate solicitor and gambling regulation expert at Poppleston Allen.

Bradley says that with the shift towards hybrid working, organisers now need to be more cautious. “While formal gambling activity is heavily regulated by the Gambling Commission, there is an exception designed to allow the general public to have a bit of fun by taking part in what is officially called a work lottery for major events such as the Grand National or a World Cup,” he explains.

“But what many people may not realise is that the rules are very clear in that you can only sell physical tickets and all players must work in the same office – contests running across different office locations of the same company are not allowed.”

So what should employers consider with sweepstakes, and what if yours has not kept on the right side of the law? People Managements asks the experts.

The ground rules

While acknowledging that sweepstakes in the workplace are common and are an easy way to have fun, Sarah Williams, head of employment at Taylors Solicitors, says that “some employers may be surprised to know that, technically, sweepstakes are one of eight types of lotteries that are regulated by the Gambling Commission, even though it is not necessary to apply for a gambling licence”.

She warns that if the sweepstake is in any way illegal, then the organiser, or the company, will be held responsible. “The Gambling Commission is a regulatory authority and, if it has concerns, it will investigate a lottery and request a discussion with the organiser or operator – but it doesn’t stop there. If the Gambling Commission is not satisfied, then ultimately the organiser could be fined or prosecuted,” Williams says.

Echoing this, Sarah Bull, partner at Wilsons Solicitors, says: "Under UK gambling laws, organisations that run gambling events usually need a licence. However, if an employer follows the right rules, a workplace sweepstake will be considered a work lottery, for which no licence is needed. The rules are set out on the Gambling Commission website.

Bradley says there are a few ground rules to make sure a workplace sweepstake does not get anyone in trouble with the Gambling Commission: “All players must pay the same amount for a ticket. Teams must be decided by chance; for example, drawn out of a hat. No one can make a profit and all stakes must be returned as prizes, although an organiser can deduct administration costs for running the contest. The sweepstake can only be advertised at the work premises and there must be a winner – the prize cannot be rolled over.”

What can make your sweepstake illegal?

James Potts, director of legal services at Peninsula, points out that, “before proceeding with any sweepstake, it is important to first check your contracts for gambling clauses as they may forbid any form of gambling – which includes sweepstakes”.

While acknowledging that “no general law prohibits workplace sweepstakes”, Kirstie Beattie, head of team and solicitor at WorkNest, warns that “employers in certain industries, such as finance, might want to devise a policy if they’d prefer to prohibit gambling within the workplace, even on a small scale such as this”.

“Other policies might stipulate a maximum financial contribution on workplace gambling,” says Beattie, explaining that “they might confirm that while the activity isn’t officially sanctioned by the employer, any related misconduct may be managed via the company disciplinary procedures”.

“The policy might also state that the company doesn’t accept any liability in the event the sweepstake is mismanaged, and employees participate at their own risk or on a purely voluntary basis,” she adds.

Intervene and don’t try to cover it up 

If you discover your sweepstake has unwittingly become illegal, employers should intervene, says Potts. “If employers discover an illegal sweepstake has already commenced, they should intervene to prevent a potential issue with the Gambling Commission,” he advises.

“Employers can re-run the sweepstake as an exempt workplace lottery, which allows colleagues working from the same workplace to participate,” he says, adding that employers should ensure there is consistency in terms of the amount paid for the physical ticket, that stakes are returned as prizes and that remote or field-based colleagues are afforded the opportunity to participate “by physically attending to purchase the ticket and not provided with the same by email or telephone”.

Meanwhile, Williams says employers that are concerned about any element of fairness should remedy it quickly. “Rather than cover up their mistake they should try and take action,” she says. “The best approach is to try and put all employees back into the position they were in before the sweepstake was organised; this basically means refunding everyone and consequently not awarding anyone prize money.”

But if this is difficult for employers, she says the prize money could still be awarded to avoid disappointment, as organisations need to be sensible and consider any mistake carefully.

“There is no need to overreact, and it is unlikely that, in relation to a low-value sweepstake, an employer will have to contact the Gambling Commission. If there are other issues such as complaints about discrimination, then this is an employment matter, which the employer must deal with in accordance with its own internal policies and procedures,” she adds.

Can sweepstakes be discriminatory? 

Beattie highlights that gambling addiction is not a protected characteristic and “is therefore not protected from discrimination”.

However, she warns that some employees’ religions or belief systems may prohibit gambling in any form, “meaning the sweepstake has a disproportionate negative impact on those sharing that religion or belief. This could lend itself to an indirect discrimination claim.”

In such instances, “the sweepstake would then have to be justified as a proportionate means of achieving a legitimate aim. So the employer should try to think of a more inclusive way to celebrate the World Cup,” Beattie says.

Bull notes that “if an employee has a very serious gambling addiction, it could be considered a disability under UK equality laws”. However, “if the employer is not aware of the addiction, it would not be discriminatory for them to run a sweepstake”.

In cases where businesses are aware of such addiction, they “should consider discussing any proposal to arrange a sweepstake with the employee before the sweepstake takes place", Bull advises.

Richard Williams, gambling and regulatory partner at Keystone Law, says that, because of religious restrictions or problems with gambling addiction, “while an office sweepstake on the World Cup may sound like a bit of fun, it’s important that employees do not feel excluded or feel obliged to participate in something they may not wish to get involved in”.  

Remember the rules on fair treatment of employees

“Even if the sweepstake itself is legal, it’s vital to remember the rules surrounding fair treatment of employees,” says Potts. “Assuming you meet all your obligations under the Gambling Act 2005, you can then turn your attention to protecting staff against unlawful discrimination and harassment under the Equality Act 2010.

“For example, when conducting a sweepstake, you should ensure all onsite staff are given the opportunity to participate. You shouldn’t assume that, for example,  female employees won’t want to because they ‘don’t like football’.”

Potts also warns that a sweepstake could bring out a competitive side usually reserved for out-of-office activities: “Banter when discussing teams and players can often turn to hostility and cause offence, even if done unintentionally. As such, employers must set clear boundaries and reiterate the expected standards of language and behaviour in the workplace. Those who fail to do so may find themselves vicariously liable for sweepstake-related misconduct issues.”