A lottery is a game played according to established rules, in which players compete for cash or non-cash prizes based on the tickets they have purchased. Events in which a person who purchases a specific good or service can win an additional prize are not considered lotteries. Gambling organized by companies holding gambling licenses (casinos, sports betting, slot machine parlors, and their online equivalents) is also not a lottery.
Lotteries held in Lithuania are divided into major and minor lotteries. Major lotteries in Lithuania may be organized by companies of the Republic of Lithuania, as well as foreign companies that have registered a branch in the country, operate in accordance with the laws of the Republic of Lithuania, meet the requirements of the country’s laws, and have obtained a license to organize major lotteries. Such licenses are granted by, and the activities of the companies that receive them are supervised by, the Gaming Control Authority under the Ministry of Finance of the Republic of Lithuania. The same basic requirements apply to the granting of licenses for small lotteries, but these licenses are issued by the executive body of the municipality in whose territory the lotteries are to be organized.
What sets large lotteries apart is that their tickets may be sold throughout the entire territory of Lithuania, and there is no limit on the face value of the tickets to be sold. All lotteries whose drawings are broadcast on television and whose tickets are sold in shopping centers and other usual locations are organized throughout the territory of Lithuania and are therefore classified as major lotteries. Tickets for small lotteries are sold and the lottery is organized during sporting events, cultural events, or other public events, and prizes are awarded by the end of the event, and the total face value of tickets to be distributed may not exceed 30,000 euros.
It is most important for lottery participants to know that, regardless of the type of lottery, lottery organizers must hold an operating license, and the lottery itself must have approved rules. At the request of lottery participants, the lottery organizer must provide them with the aforementioned documents.
According to a 2017 lottery market survey conducted by Kantar TNS, the average Lithuanian spent 2.7 euros per month on lotteries. The same study showed that 63 percent of the country’s residents participated in lotteries at least once a year. Thus, counting only those who participate in lotteries, players in Lithuania spent an average of 4.3 euros per month on lotteries. A comparison with other countries shows that only a few European countries spend less on lotteries than Lithuania. A survey of consumer habits at ticket sales locations showed that people most often purchase a single lottery ticket.
The organization of lotteries is supervised by the Gaming Control Authority under the Ministry of Finance of the Republic of Lithuania. In carrying out its assigned state functions, the Gaming Control Authority approves the rules for planned lotteries, as well as any subsequent amendments and additions to those rules, and ensures that all organized lotteries comply with the requirements of Lithuanian law and that the interests of players are not violated during their organization. In addition, specialists from the Gaming Control Authority periodically conduct inspections of lottery organizers’ operations and investigate complaints received from players.
Lotteries and games of chance differ significantly in terms of player engagement. This difference is perfectly illustrated by statistics on problem gamblers. According to data from the Gaming Control Authority under the Ministry of Finance of the Republic of Lithuania, as of June 30, 2018, the Register of Persons Who Have Restricted Their Ability to Gamble contained 4,480 requests to be barred from gambling and participating in online gambling, and this number is steadily increasing. Meanwhile, neither government agencies nor the Lithuanian Lottery Association, nor the lottery organizing companies affiliated with it, have received any similar requests to restrict participation in lotteries to date.
At the European level, it is widely agreed that the most important factor in ensuring that lotteries benefit society is self-regulation by lottery organizers. Lithuanian lottery organizers base their operations on the principles of responsible gaming, ensuring the protection of lottery participants through prevention and education, and providing players with a detailed explanation of the terms of play and the role of chance in the game. The country’s lottery organizers are also prepared to provide additional assistance to players should the need arise: information is available at ticket sales locations telling lottery participants where they can seek help if necessary. On the other hand, experts have not yet encountered situations where lottery participants have approached them seeking help.
People’s involvement in playing the lottery can also be gauged by the amounts of money spent on lotteries. According to a 2017 lottery market survey conducted by Kantar TNS, the average Lithuanian spent 2.7 euros per month on lotteries. A comparison with other countries shows that only a few European countries spend less on lotteries than Lithuania. It is worth noting that the average amount spent on lottery tickets is incomparably lower than the average amount spent on other forms of gambling.
Most of Lithuania’s millionaires—though this was before the introduction of the euro—emerged after the “Teleloto” lottery began. Before the euro was introduced in the country, 63 players made it onto the “Teleloto” millionaires’ list.
Data from the past six years shows that 14 “Vikinglotto” players in Lithuania have won cash prizes exceeding 100,000 euros. The list of “Teleloto” winners is even longer. Over the past six years, 27 players have won prizes exceeding 100,000 euros. Two other players have each shared a prize of more than 125,000 euros on one occasion, and a sum of 144,800 euros on two occasions. Meanwhile, the international “Eurojackpot” lottery brought a record jackpot of more than 7.6 million euros to Lithuania.
Among the most recent lottery wins, the following major 2017 jackpots are worth mentioning:
When participating in lotteries, Lithuanians compete for prizes not only with each other but also with residents of other European countries. Since its arrival in Lithuania in 2011, “Vikinglotto” has given players in our country the opportunity to compete with residents of Norway, Denmark, Iceland, Sweden, Finland, Estonia, Latvia, and Slovenia. And the biggest prize in Lithuania is currently up for grabs for “Eurojackpot” players—with a top prize that can grow to as much as 90 million euros, Lithuanians are competing alongside players from 17 other countries.
When regulating the activities of the lottery and gambling industry in Lithuania, a distinction was made from the very beginning regarding their tax bases, with different tax treatment applied to lotteries and gambling. For lotteries, taxes are calculated based on the face value of lottery tickets sold (i.e., the lottery organizers’ sales revenue), whereas in gambling, the tax base is the difference between the money paid by gamblers and the winnings paid out to them (i.e., the gambling operator’s net revenue), or a fixed tax on gambling equipment is applied.
In accordance with the law, lottery organizers pay 13 percent of the value of lottery tickets sold: 5 percent is paid into the state budget as a lottery tax, and another 8 percent is allocated to charity or support in accordance with the law. Meanwhile, in the case of games of chance, the gambling operator’s net income is taxed at a rate of 15% in accordance with the law (or a fixed fee on gambling equipment is applied).
Example: If lottery players purchase lottery tickets worth 100 euros, regardless of the total amount of winnings paid out to them, the lottery organizer must, in accordance with the law, pay 5 euros in taxes to the state budget and allocate another 8 euros to charity or support. Meanwhile, if gamblers place bets totaling the same 100 euros at a gambling venue (e.g., a betting shop) and win 90 euros, the gambling operator’s net income—that is, the 10 euros remaining with the operator after paying out winnings to players—will be taxed at the 15 percent rate established by law. Thus, in both of the aforementioned cases, having provided services for the same amount of 100 euros, the tax burden on lottery and betting operators will be completely different: the lottery operator will pay a total of 13 euros in taxes, while the gambling operator will pay only 1.5 euros in taxes.
In accordance with the law, lottery organizers pay 13 percent of the value of lottery tickets sold: 5 percent is paid into the state budget as a lottery tax, and another 8 percent, as required by law, goes toward charity or support.
Where does this 8 percent of the funds allocated annually by lottery organizers for charity or support go? Lithuanian lottery organizers traditionally allocate the majority of these funds to the country’s Olympic movement—the Lithuanian National Olympic Committee (LTOK) and the Lithuanian Paralympic Committee (LPOK), which use these funds to support the preparation and participation of our country’s Olympic and Paralympic athletes in the Olympic Games. In addition, Lithuanian lottery organizers provide support to other sports organizations and cultural institutions, as well as initiatives in the arts, healthcare, and science.
When comparing different countries, Lithuanian lottery operators are among the top supporters of sports in Europe, and their share of this support is steadily growing. Only lotteries in Poland and Norway have allocated more funds to sports than those in Lithuania. Meanwhile, in other European countries where lotteries also support sports—Switzerland, Germany, the Netherlands, Austria, Hungary, Slovenia, Portugal, and Israel—the share of revenue allocated to sports by lottery operators is lower.
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