Law firm's warning about effect of lottery licences

Medium-sized charities could be deterred from fundraising through large lotteries because of heavy fees introduced this month, according to a law firm.

Section 98 of the Gambling Act, which came into force on 1 September, says that lottery operators must pay annual fees and buy licences if ticket revenues surpass £20,000 for a single draw or £250,000 a year from several draws.

Licences cost societies, including charities, between £165 and £329, and annual fees cost from £348 to £1,392. External lottery managers must apply for additional personal licences costing from £988 to £2,306, and must pay personal annual fees of between £1,981 and £2,541.

"External lottery managers are likely to pass costs on to societies," said Keith Arrowsmith, partner with responsibility for voluntary organisations at commercial law firm HLW. "A huge body of middle-sized charities could be penalised."

Larger charities and voluntary groups will have to appoint licensees to manage lotteries. Licensees who do not follow codes of conduct could face up to 51 weeks in prison or heavy fines.

Mark Lepkowski, communications manager at the Gambling Commission, said: "Society lotteries have always paid fees. These fees are significantly lower than those for other operators."

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