Desmond launched the Health Lottery back in October 2011 with the aim of raising £50m a year to tackle health inequalities in the UK.
The TV ad ran earlier this year and was created in-house.
It included the voice-over, "already three hundred and seventy five thousand people have won, with jackpot winners scooping up to a quarter of a million pounds each. And you could be next."
The text on-screen said "Up to £1/4 million."
Images of four couples were shown. One was labelled "200k WINNER!" and the other three were labelled "100k WINNER!".
The Advertising Standards Authority (ASA) was hit by a number of complaints which challenged whether the ads misleadingly implied there was regularly a jackpot of £250,000, which they understood was not the case.
In its defence, the Health Lottery said the ad was broadcast for five days in the run up to a particular weekly draw, adding that it was for the Health Lottery generally, rather being specifically linked to a particular draw.
It stated the draw featured a regular weekly top prize of £100,000 but in some weeks there had been special promotions with bigger top prizes.
Since the launch of the Health Lottery, in October 2011, there had been top prizes of £200,000 on three occasions and a £250,000 on one occasion.
The Health Lottery said it had been advised by Clearcast that it was acceptable to advertise a lottery in which the top prize could be won on at least one out of 10 occasions even if it was not available in the next draw.
It argued that it was acceptable to refer to "winners scooping up to a quarter of a million" because there had been a £250,000 prize, and a £200,000 prize, available in the previous ten draws.
The Health Lottery said the ad referred to jackpot winners "scooping up to a quarter of a million pounds each", which clearly indicated that prizes of more than £100,000 would not be available every week.
In its ruling, the ASA noted The Health Lottery had offered a jackpot of £250,000 on one occasion around two months before the ad appeared.
The watchdog said the references in the ad to the top prize were preceded with the words "up to", which the ASA said made it clear that the prize of £250,000 was not always available.
But it also noted that the claims, "already three hundred and seventy five thousand people have won, with jackpot winners scooping up to a quarter of a million pounds each" and "you could be next" was likely to be interpreted as suggesting that multiple winners had claimed the top prize of £250,000 and that the same amount would be available again on a regular basis.
On balance, the ASA said the ad misleadingly implied there was a jackpot of £250,000 more regularly than was the case.
It ruled therefore that the ad could not be used again in its current form.Follow @johnreynolds10