---
title: Understanding the Lottery Prohibition
description: Explore the intricacies of the lottery prohibition under Section 20 of the Federal Deposit Insurance Act and understand its implications for banks and financial institutions.
---

[Banker's Compliance Consulting Blog ](https://blog.bankerscompliance.com/en)

# [Understanding the Lottery Prohibition](https://blog.bankerscompliance.com/en/understanding-the-lottery-prohibition)

 Written by [David Dickinson](https://blog.bankerscompliance.com/en/author/david-dickinson) | Dec 23, 2025 8:21:20 PM

Section 20 of the Federal Deposit Insurance Act states that a bank may not:

1. *…deal in lottery tickets;*
2. *…deal in bets used as a means or substitute for participation in a lottery;*
3. *…announce, advertise, or publicize the existence of any lottery; or*
4. *announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.*

#3 is where the most issues arise. But let’s take a step back because you first need to know what a lottery is. A lottery …*includes any arrangement, other than a savings promotion raffle, whereby three or more persons (the "participants") advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the "winners") will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes:*

1. *…a random selection;*
2. *…a game, race, or contest; or*
3. *…any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.*

David explains how institutions can run into trouble with this prohibition in the video.

<https://blog.bankerscompliance.com/hs/cta/wi/redirect?encryptedPayload=AVxigLJqAS3SgwZfO6mj4vp4d5hV6gLhJj3m7zSskI%2FqfUaG8hjGIprsyQ14fDMaUN74M%2FZHwplbShiImbVZF50rBlk7Dd7A7bxZMMWCk7jXiq9aMKb6AHxwY3Jt7wU7MAmEv9q25qP%2Fkb0wg5aukkrNEdMQ%2FfAgoxVoriUxpHPKA7u60O2n43wR2DWe8LcMHsngb9D%2F&webInteractiveContentId=181387517823&portalId=21201105> 

Published  
2025/12/23

 

[View full post](https://blog.bankerscompliance.com/en/understanding-the-lottery-prohibition)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "David Dickinson"
  },
  "dateModified" : "2025-12-23T20:21:20.633Z",
  "datePublished" : "2025-12-23T20:21:20Z",
  "headline" : "Understanding the Lottery Prohibition",
  "image" : {
    "@type" : "ImageObject",
    "height" : 3900,
    "url" : "https://21201105.fs1.hubspotusercontent-na1.net/hubfs/21201105/Lottery%20Prohibition.jpeg",
    "width" : 5200
  },
  "mainEntityOfPage" : "https://blog.bankerscompliance.com/en/understanding-the-lottery-prohibition",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60.0,
      "url" : "https://fs.hubspotusercontent00.net/hubfs/21201105/Bankers_Compliance_Consulting_Logo%20copy%202.jpg",
      "width" : 310.30304
    },
    "name" : "Banker's Compliance Consulting Blog"
  }
}
```