US evangelist Shawn Holes, 47, was preaching in Glasgow city centre on March 18 when he was arrested and detained overnight in a police cell.
Police later charged him with breaching the peace and told him to pay the fine on the grounds that his remarks were “homophobic” and had been “aggravated by religious prejudice”.
Mr Holes was touring the UK as part of a group of evangelists from the US. He was taking questions from the public along when a gay couple in the crowd asked him about his views on homosexuality.
He allegedly told them that homosexuals “deserve the wrath of God” and would go to hell.
Mr Holes said the incident had “felt like a set-up” by gay rights campaigners and that he had only admitted the charge because he wanted to return to the US to see his family and father, who is staying in a hospice.
The case has concerned even gay rights campaigner Peter Tatchell, who branded the fine “disproportionate”.
The Christian Institute helped pay for Mr Holes’ lawyer, Tony Kelly, who had advised him to challenge the charge.
Mr Kelly said: “This case raises important issues about the interface between the criminal law in Scotland, freedom of speech and religious freedom.”
Christian Institute director Colin Hart said: “The fine in this case was totally disproportionate. The police should have never arrested Mr Holes at all.
"We believe that had he fought the charge it would have been proved that he did nothing wrong. We are disappointed that Mr Holes pleaded guilty.”
Peter Kearney, spokesman for the Roman Catholic Church, argued that Mr Holes should not have been charged because he was expressing a religious conviction.