Charity Monitoring Norway does not approve lotteries. We approve only nonprofit organizations. Nor do we regulate lotteries, as—unlike fundraising—they are directly regulated by law. The Norwegian Gaming Authority is responsible for ensuring that lottery operations in Norway are conducted properly. Some of the organizations approved by the Fundraising Control Authority do, however, operate lotteries, and certain aspects of these lottery operations may be of interest to us.

Organizations that wish to operate a lottery must apply for a license from the Lottery Authority, and the Lottery Act provides clear guidelines on how lotteries are to be operated. It is therefore the Lottery Authority’s responsibility to grant licenses and approve lotteries, as well as to oversee that lottery operations are conducted properly.

All lottery proceeds in Norway, with the exceptions specified by law, must be used to fund humanitarian and charitable causes. In accordance with the Norwegian Accounting Standard for Nonprofit Organizations, these proceeds are classified as operating revenue.

In addition to accounting standards, it can be difficult to determine a lottery participant’s motivation. Since the lottery is required to allocate a portion of its revenue to prizes, the incentive to participate may be something other than simply a desire to support a nonprofit organization. Ask yourself: Would you give back the million-dollar prize or the new car if you won, just because you really only wanted to support the organization? And even if you don’t expect to win, isn’t it still a little exciting to play anyway?

Running a lottery involves a number of operational costs: prizes, operations, incentives for agents, etc. It is therefore easy to argue that it is not appropriate to compare outright gifts with lottery revenue, even if the proceeds go toward a charitable cause.

Revenue from various lotteries received by our approved organizations is recorded as operating revenue, not as fundraising revenue. This revenue will therefore have no impact on the organization’s fundraising percentage. However, how they use these funds will still affect the program percentage or the administrative percentage, depending on what they actually use the lottery proceeds for. Approved organizations must continue to follow the ethical guidelines in their promotion and marketing of lotteries.

Feel free to play games or buy lottery tickets. You should just be aware that a smaller portion of your money goes toward the cause than with direct donations. There’s nothing wrong with that, as long as the lottery complies with applicable regulations and its promotion and marketing are conducted in accordance with ethical guidelines. Whether the Lottery Act itself is adequate or not is a matter for others—not Charity Monitoring Norway—to assess.