GUIDANCE NOTE: COMPLIANCE RISKS IN CHARITABLE LOTTERIES IN NIGERIA

In this guidance note, our education lawyers help you discover how Nigerian schools can lawfully run charitable or private lotteries. We used Lagos State as a case study. We explained licensing, exemptions, penalties, and compliance tips to help educators, alumni offices, and administrators manage raffle draws while avoiding fines and reputational damage.

Why This Matters for Schools

Across Nigeria, schools and universities often organise raffle draws during annual dinners, fundraisers, alumni events, and charity drives. While such initiatives may seem harmless, mainly aimed at supporting educational causes, they can fall squarely under “lotteries” as defined by Law.

The Lagos State Lotteries and Gaming Authority Law 2021 (the “Lotteries and Gaming Authority Law”) broadly defines lottery as including other charitable lotteries, whether public or private.

Under the Law, “other lotteries” include private lotteries, charitable lotteries, society lotteries, and promotional competitions.

The Black’s Law Dictionary also defines a lottery as a raffle. Nigerian courts generally adopt the ordinary meaning of words when interpreting legislation.

Judicial attitude means that even a small internal raffle conducted during a Vice Chancellor’s Dinner is legally a lottery.

If your school operates in Lagos, the Lagos State Lotteries and Gaming Authority (“LSLGA”) has regulatory oversight.

Regardless of whether your students or alumni are the only participants. The Lotteries and Gaming Authority Law applies to all operators, including non-profit educational entities incorporated under Nigerian Law.

Why “Non-Commercial” Still Needs Approval

Some schools mistakenly assume that no licence is required because a raffle is non-commercial (proceeds going to scholarships or projects). Under Section 1, a “non-commercial licence” still falls within the LSLGA’s oversight and requires application and approval.

To qualify, at least 80% of proceeds must go to the stated cause, and the raffle must not be open to the public without authorisations. However, you cannot self-classify; only the LSLGA can confirm your raffle as “non-commercial” through its permitting process.

Moreover, the LSLGA may grant exemptions to non-commercial lotteries in Lagos State.

The Legal Framework

Key provisions of the Law that bring school raffles within LSLGA’s regulatory net include:

• Section 14(c): The Lotteries Board must ensure good causes, like education, are promoted, but still within the gaming regulatory framework.
• Sections 19 & 33: The LSLGA regulates and licenses all lottery and gaming activities, including “other lotteries” such as raffles. No person may operate without a subsisting licence or permit.
• Section 34: The LSLGA can issue non-commercial and private gaming permits, subject to terms and conditions.
• Section 35(2)(b)-(c): Rules, prizes, and intervals for any “other lottery” must be approved by the Authority.
• Sections 86(d) & 88(b)-(c): Empower the Authority to investigate and penalise unlicensed operations.
• Sections 94, 96, and 99(6): Non-compliance attracts fines and possible custodial sentences.
• Section 106: Lists offences, including operating without approval and obstructing regulators.

Penalties for Non-Compliance

The Law imposes severe penalties on unlicensed lottery operators, even non-profit ones. Examples include:

• Operating without a licence – fines up to ₦5,000,000, imprisonment, or both.
• False or misleading statements in applications – fines and custodial sentences.
• Obstructing LSLGA officials – fines up to ₦2,000,000 or one-year imprisonment.
• Revocation of the licence and public listing as a defaulter, causing reputational damage.
• Sealing of premises for unlicensed operations.

Beyond the fines, the reputational harm, media coverage, alumni backlash, and donor concerns can be long-lasting for an educational institution.

Practical Compliance Steps for Schools

If your school, alumni office, or students’ association plans a raffle in Lagos:

1. Confirm Scope – Check if the activity meets the Law’s definition of a lottery. Where your school awards prizes under a chance game in exchange for payment (ticket sales, donations), it almost certainly does.
2. Seek LSLGA Approval – Apply for a non-commercial licence or permit well in advance. Include game rules, prize structure, ticketing process, and beneficiary details.
3. Use Clear Rules and Documentation – Ensure the LSLGA approves the rules (Section 35(2)). Keep accurate participant and prize records for at least five years (Section 32).
4. Promote Responsibly – Avoid misleading advertising (Section 54). Do not target minors or vulnerable persons.
5. Allocate Proceeds Properly – Keep proof that you applied at least 80% of the proceeds to the intended educational cause.
6. Train Key Staff – Staff involved should understand compliance obligations, prize distribution rules, and record-keeping duties.
7. Engage Legal Counsel – A lawyer familiar with the Law can prepare compliant applications and mitigate risks.

Special Considerations for School Authorities

• Alumni events are not exempt. If the raffle is part of a dinner or fundraising gala, LSLGA approval is still required.
• Third-party facilitators (e.g., event managers) do not remove your legal responsibility. The school remains liable.
• Remote or online raffles (selling tickets via websites, social media, or payment apps) require additional scrutiny as they may trigger “remote gaming” provisions.

Why Compliance Protects You

• Legal Protection – You avoid fines, prosecution, and regulatory sanctions.
• Reputational Integrity – Alumni, parents, and donors trust that your institution operates transparently.
• Operational Continuity – No risk of regulators shutting down your event.
• Support for Good Causes – By complying, your educational project qualifies as a legitimate “good cause” under the Law, possibly opening doors to grants.

Key Takeaways

• In Lagos State, a raffle = a lottery under the Law.
• Both commercial and non-commercial lotteries require LSLGA approval.
• Ignoring compliance can lead to fines, criminal charges, event disruption, and reputational damage.
• The safest path is proactive licensing and transparent management.

Conclusion

Charitable intent does not exempt a school from gaming regulations. In Lagos, the LSLGA enforces compliance on all lottery activities, including raffles conducted by non-profits. Compliance costs far less than non-compliance’s financial and reputational damage.

Lagos State Government is a model for other state governments in Nigeria. Following the Supreme Court of Nigeria’s annulment of the National Lotteries Regulatory Commission Act, we foresee the State Governments’ stringent enforcement of lotteries of all sorts.

SRJ Legal is Nigeria’s first bespoke education law firm. We complement our education law practice with fintech and commercial dispute (litigation). At the same time, we provide corporate counsel services to businesses and individuals, including families.