Charities which raise money through lotteries may have to apply for a gaming licence once new rules come into force on 1 September.

According to Keith Arrowsmith of law firm HLW, new legislation which is buried in the Gambling Act 2005 will mean that charities holding lotteries raising over £20,000, or more than £250,000 in a year, will be required to have a gaming licence. Arrowsmith warned that the licence is both costly and complex to acquire.

Arrowsmith said that while small charity events were unlikely to be affected, and very large charities could well have the resources to acquire the licence, large amounts of mid-sized organisations could be negatively affected by the new rules. “There is a real danger that having fun and raising some money along the way will become much harder and that well-meaning people who are just trying to help others may be lumped together with money launderers and gambling syndicates.”

However, a spokesperson for the Gambling Commisson confirmed that under the new rules, the fees associated with the licence are not nearly as steep as in the past. Before the Gambling Act 2005, for lotteries earning over £100 thousand a year, there was a £5,000 registration fee plus an annual fee. Under the new rules, that application fee has been reduced to £165 with an annual fee of £348 (discounted by 25% in the first year).

For information on applying for a licence, visit the Gambling Commission's website at
/www.gamblingcommission.gov.uk/client/index.asp?ContentId=1