A lottery is a game with established rules where players buy tickets for a chance to win cash or other prizes. Promotions where a person who buys a certain good or service can also win an additional prize are not lotteries. Games of chance run by licenced gambling operators – casino games, fixed-odds betting, slot halls and their online equivalents – are not lotteries either.
A distinction is made in Lithuania between major and minor lotteries. Major lotteries can be run by Lithuanian companies and Lithuanian subsidiaries of foreign companies that operate in accordance with the laws of Lithuania, meet specific legal requirements and have obtained a licence to run major lotteries. Such licences are issued by the Gaming Control Commission under the Ministry of Finance of the Republic of Lithuania, which also then supervises the activities of licenced companies. The main requirements for licences to run minor lotteries are the same, but the licences are issued by an authority of the municipality where the lotteries are to be operated.
A major lottery is defined as one whose tickets can be distributed throughout all Lithuania and with no restriction on the nominal value of the tickets to be sold. All the lotteries seen on TV and whose tickets are sold in shopping centres and similar places operate throughout Lithuania, so they are considered major lotteries. For minor lotteries, tickets are distributed and the lotteries take place during sporting, cultural or other public events, and winnings are paid out by the end of the event in question, with a limit of 30,000 euros on the nominal value of the tickets to be sold.
It is important for lottery participants to know that, regardless of a lottery’s type, its organizer must have an operator’s licence and the lottery itself much have approved rules. Lottery operators are obliged to show these documents to lottery participants on request.
Lottery activities are supervised by the Gaming Control Commission under the Lithuanian Ministry of Finance. In carrying out the functions entrusted to it by the state, the Gaming Control Commission coordinates the rules of planned lotteries and any later changes or additions to them. It also ensures that all lotteries which are held satisfy the requirements of Lithuanian law and that players’ rights are not violated in the way the lotteries are organized. Officials of the commission periodically inspect the operations of lottery operators and investigate complaints received from participants.
According to a survey of the lottery market conducted by Kantar TNS in 2017, people in Lithuania spend an average of 2.70 euros a month on lotteries. The same survey showed that 63% of people in the country had taken part in lotteries at least once in the past year. Thus, those people in Lithuania who actually participate in lotteries on average spend 4.3 euros a month on them. That is less than people spend on lotteries in all but a few other countries in Europe. A study of consumer habits at places where tickets are sold has shown that people most often buy a single lottery ticket.
People engage with playing the lottery very differently than with gambling. The statistics for problem gamblers make that clear. According to the Gaming Control Commission, as of 30 June 2018 Lithuania’s gambling self-exclusion register included 4,480 persons who had asked not to be allowed to gamble or to game remotely, and the number was steadily growing. By comparison, neither state institutions nor the Lithuanian Lottery Association nor the lottery operators that belong to it had thus far received any analogous requests for self-exclusion from participation in lotteries.
There is agreement at the European level that the most important thing for ensuring that lotteries are beneficial for society is self-regulation by lottery operators. Lithuanian lottery operators base their activities on the principles of responsible gaming. The safety of lottery participants is ensured through prevention and education, with full explanation to them of the conditions of play and the role of chance in the game. The country’s lottery operators are also ready to ensure additional assistance for players whenever needed: at the places where tickets are sold lottery participants are provided with information about where they can go for help if they ever need it. On the other hand, specialists so far have not seen such situations of lottery players coming to them in need of help.
People’s level of engagement when playing the lottery can also be assessed in terms of how much money they spend on it. A 2017 survey of the lottery market by Kantar TNS showed that people in Lithuania spend an average of 2.70 euros a month on lotteries. That is less than in all but a few other countries in Europe. The average amount that people spend on lottery tickets can also be seen to be incomparably smaller than what people typically spend when gambling.
In regulating lotteries and gambling, Lithuania has always applied a different tax basis and different tax rates to the two business sectors. Lottery taxes are calculated on the basis of the nominal value of the lottery tickets sold (i.e., the lottery operator’s sales revenue), while the tax basis for gambling is the difference between the amount of money players pay in and the amount of winnings paid out to them (i.e., the gambling operator’s net income) or a fixed tax per gambling machine applies.
By law, lottery operators pay 13% of the value of distributed lottery tickets: 5% goes to the state budget as a lottery tax, and another 8% gets allocated, as stipulated by law, to charitable causes or sponsorship. Gambling operators, meanwhile, pay a tax of 15% on their net income, as stipulated in the law (or they pay a fixed tax per gambling machine).
An example: If lottery players buy 100 euros worth of lottery tickets, then regardless of how much is paid out to them in total winnings, the lottery operator, as stipulated by law, will have to pay 5 euros of taxes to the state budget and give another 8 euros to charity or sponsorship. Meanwhile, if players at a gambling venue place bets for the very same amount of 100 euros, and if they win 90 euros, then the gambling operator’s net income, which is the 10 euros left after the payment of winnings to the players, will be taxed at the legally stipulated rate of 15%. Thus, in these two cases where services for an equal amount of 100 euros are provided, the tax burden is completely different for lottery and gambling operators: a lottery operator will have to pay total taxes of 13 euros, while a gambling operator will pay taxes of just 1.50 euros.
By law, lottery operators pay 13% of the value of the lottery tickets that are sold: 5% goes to the state budget as a lottery tax, and another 8% gets allocated, as stipulated by law, to charitable causes or sponsorship.
Where does the 8% go that lottery operators provide to charitable causes or sponsorship each year? Lithuanian lottery operators traditionally allocate the largest amounts to the Olympic Movement in the country, namely to the National Olympic Committee of Lithuania (LTOK) and the Lithuanian Paralympic Committee (LPOK), which use the funds to finance the training of athletes and their participation in the Olympic and Paralympic Games. But lottery operators also provide support for other sporting and cultural organizations as well as for art, healthcare and science initiatives.
To make an international comparison, Lithuania’s lottery operators are among those in Europe that provide the most support for sport, and that support is continually growing. Only lotteries in Poland and Norway provide more money for sport that do those in Lithuania. In the other European countries where lotteries support sport – Switzerland, Germany, the Netherlands, Austria, Hungary, Slovenia, Portugal and Israel – the share of income that lottery operators give to sport is smaller.
In playing lotteries, Lithuanians compete for prizes not only among themselves, but also with people in other European countries. Vikinglotto, which came to Lithuania in 2011, lets players in the country compete for the jackpot and grand prize with people in Norway, Denmark, Iceland, Sweden, Finland, Estonia, Latvia and Slovenia. But Eurojackpot is where people in Lithuania currently have the chance to win the biggest prizes. There they compete with players from 17 other countries for jackpots that can get as big as 90 million euros.
It was the launch of the Teleloto lottery that made the most millionaires in Lithuania, even if that was before introduction of the euro. A total of 63 players made it onto the Teleloto list of millionaires prior to euro adoption.
Data show that in the last six years 14 players of Vikinglotto in Lithuania won cash prizes of more than 100,000 euros. The list of Teleloto winners is even longer: 27 players won prizes bigger than 100,000 euros in the last six years. In addition, two players on one occasion shared a prize of more than 125,000 euros and two players twice shared sums of 144,800 euros. Meanwhile, the international lottery Eurojackpot brought Lithuania its record prize of more than 7.6 million euros.
Recent lottery winnings include the following biggest prizes from 2017:
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