Camelot hit by £3m Gambling Commission fine
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Camelot, the operator of the UK National Lottery, has been fined £3 million (€3.6 million/$3.7 million) after an investigation by the UK Gambling Commission into allegations of a fraudulent prize claim and payout.
The incident took place 2009 but only came to light last year after it was brought to the attention of both the Commission and the police.
In its investigation of the case, the Commission found that Camelot had breached three aspects of its operating licence, regarding its controls relating to databases and other information sources; the way it investigated a prize claim; and its processes around the decision to pay a prize.
The Commission said that while it could not be certain a fraud had taken place, “it was more likely than not that a fraudulent prize claim had been made and paid out”.
Camelot has accepted the findings and confirmed that it will not exercise its right to appeal the regulatory decision.
The Commission also noted that Camelot took action as soon as the case came to light, with the operator having made a series of changes to ensure a similar issue could not occur, as well as commissioning external assurance of its controls and processes around prize payout.
In addition, the Commission said its investigation found that the circumstances of this case were specific and did not uncover systemic failings that would call into question the validity of other prize payouts.
The £3 million penalty is for the benefit of good causes and includes £2.5million to represent the amount that would have been received by good causes had the prize claim not been paid.
Sarah Harrison, chief executive of the Gambling Commission, said: “The Gambling Commission’s chief concern is to ensure the National Lottery is run with integrity and that player interests are protected.
“Camelot’s failures in this case are serious and the penalty package reflects this.
“Importantly, the package also ensures that good causes will not lose out as a result of Camelot’s licence breach.
“Lottery players can feel reassured that our investigations have found no evidence of similar events happening and that controls are in place today to mitigate against future prize payout failings of this type.”
Camelot said in a statement that its internal fraud detection and prevention processes have “evolved considerably over time, and we have strengthened them still further following this review”. It said that a similar fraud “would certainly not be possible today”.
Andy Duncan, chief executive of Camelot, said: “It’s really important that people understand that this allegation relates to a unique, one-off incident dating back to 2009 and involves a potentially fraudulent claim on a deliberately damaged ticket. It has nothing to do with The National Lottery draws themselves.
“We accept that, at the time, there were some weaknesses in some of the specific controls relevant to this incident and we’re very sorry for that.
“We’ve strengthened our processes significantly since 2009 and are completely confident that an incident of this nature could not happen today. We welcome the Gambling Commission’s confirmation that this is the case.”
Related article: Camelot confirms National Lottery online account hacks