We have a Mortgage Loan Originator who would like to offer a referral incentive to employees in the branches that the MLO covers. As an incentive, a prize would be given to the person that has the most closed loans from leads they generated. Is this considered a lottery?

I would say this is an incentive program. I worked for a very large bank in the 90's and early 2000's and we had this program. I think we receive 25.00 for each mortgage referral that closed.