Small lotteries, raffles, and tombolas; applying for a permit or filing a notice for generally permitted events

A defining characteristic of lotteries is that only cash prizes are awarded. In contrast, in prize draws, non-cash prizes or both non-cash and cash prizes are awarded. The term “tombola” is used when the prize draw takes place indoors. Unless otherwise specified, the provisions regarding small lotteries apply accordingly to small prize draws and raffles.

A small lottery is defined as one in which the planned prize pool (number of planned tickets × ticket price) does not exceed 40,000 EUR.

Incidentally, lotteries with a prize pool exceeding 40,000 EUR are subject to far stricter requirements. In such cases, please first seek advice from the government in the administrative district where the lottery is to be held.

Small lotteries require a license if a stake is required and, in principle, anyone can participate in the drawing. This is the case when participation is not limited to a specific, clearly defined group of people. If small lotteries are habitually organized by clubs or other closed groups, they are also considered public games of chance. In addition to paying a ticket price, participation in the drawing may require, for example, the purchase of a good or similar item; this is referred to as a so-called “hidden stake.”

Small lotteries can be authorized in two ways. Either a so-called general permit has already been issued (Option 1), or the competent authority issues a formal permit decision for the specific individual case upon your application (Option 2).

Option 1: Small lotteries are considered permitted in cases where the requirements for a general permit are met; an individual permit is then no longer required. However, they are generally subject to a notification requirement (see “Deadlines”). Another advantage: You do not incur any administrative costs.

All governments have issued general permits for their respective jurisdictions (see “Further Links”). If you are unsure whether your planned small lottery is considered generally permitted, contact your municipality or government.

Option 2: If the small lottery you are planning is not covered by a general permit, you must submit an application to the competent authority (see “Procedure”). This application must include at least the following information:

• the exact name of the organizer (name, legal form, registered office, authorized representatives, and persons responsible for the lottery, including their addresses, email addresses, and phone numbers),
• the type, location or area, and the date or time period of the proposed lottery,
• the purpose of the lottery; details regarding the use of the net proceeds,
• details regarding the distribution of tickets; a list of ticket sales locations with addresses and respective sales hours,
• Game plan (number of tickets, ticket price, type, number, and order of prizes including their respective values, method of determining winners, notification of winners),
• Event budget:
  intended revenue (= planned prize fund, i.e., number of planned tickets × ticket price)
  minus estimated costs (e.g., expenses for prizes, printing costs for tickets, etc.)
  minus the prize pool (at least 25% of the prize fund)
  = Net proceeds (at least 25% of the prize pool; the net proceeds must be used in full for the specified purpose),
• Provisions in the event that prizes are not claimed.

Contact:

+(49) 09131 / 86 - 2363

+(49) 09131 / 86 - 3036

• The organizer of a small lottery must generally be a nonprofit, charitable, or religious organization and therefore exempt from paying corporate income tax. Exceptions may be granted for social organizations without legal personality, such as parent-teacher associations at schools. Private individuals and business owners are excluded from organizing such lotteries.
• The event must not be organized for commercial purposes. References to prizes provided by companies are permitted.
• The organizer’s net proceeds, the players’ winnings, and the costs of the small lottery must be in reasonable proportion to one another. Both the net proceeds and the total prize pool must each amount to at least 25% of the prize fund; sponsored prizes, to the extent their actual value is not known, must be included in the calculation of the total prize pool at their estimated value.
• The net proceeds must be used promptly for charitable, benevolent, or religious purposes.
• At least 1% of the tickets must result in a prize. Prizes must be appropriately graded according to their value.

To register a generally permitted small lottery, please use the registration form provided for this purpose (see “Forms”) by the competent authority (municipality or state government). In the “Deadlines” section, you will find information about the authority responsible for processing the notification. In some municipalities, you can already register your small lottery online.

If the planned small lottery is not covered by a general permit , an informal application must be submitted to the competent authority.

The following are responsible for issuing permits for small lotteries:

• Municipalities or administrative associations for all lotteries that—in terms of ticket sales locations—do not extend beyond the municipal boundaries.
• District governments for all lotteries that do not extend beyond the district, unless the municipality or administrative association is responsible.
• The Upper Palatinate Regional Government for all lotteries that extend beyond a single administrative district.

Here, too, the regional governments and some municipalities already offer an online application process.

Lotteries and prize drawings must also be registered in a timely manner with the competent central tax office in Munich, Department III (Katharina-von-Bora-Str. 4, 80333 Munich), before they begin, if the total value of the tickets exceeds 1,000 EUR. Please check with the relevant tax office to determine whether a lottery tax is applicable.

For further information on the taxation of lotteries, please refer to the information sheet from the Bavarian State Tax Office (see “Further Links”).

If a small lottery, raffle, or tombola is generally permitted, you must:

• not report small raffles or tombolas with a prize pool
  • of up to 650 EUR;
  • for prize pools over 650 EUR up to and including 5,000 EUR, notify the municipality where the event is held at least one week in advance;
  • report raffles with a prize pool exceeding 5,000 EUR to the state government in whose administrative district the event is taking place.
     
• Always register small lotteries. For a prize pool of
  • 5,000 EUR must be reported to the municipality where the event is held at least one week in advance;
  • if the prize fund exceeds 5,000 EUR, they must be reported in advance to the government authority in the administrative district where the venue is located.

If you need an individual permit for a small lottery, raffle, or tombola, there are no specific deadlines. However, you should submit the application early enough to allow the competent authority sufficient time to review it; no tickets may be sold before the permit is granted. It is therefore advisable to contact the competent authority (see “Procedure”) as early as possible.

• Decision by the Tax Office pursuant to Section 60a(1) of the German Tax Code (AO) regarding the separate determination of compliance with the requirements set forth in the bylaws under Sections 51, 59, 60, and 61 of the AO
  (formerly known as the tax office's certificate confirming the organizer's nonprofit status [exemption notice])
• For clubs: Bylaws

• 1 per mille of the approved gaming capital, but at least 30 EUR
• provided that a lottery is generally permitted, no administrative fees are charged