Camelot accepts record £3m fine from Gambling Commission

Camelot accepts record £3m fine from Gambling Commission

Friday, December 16, 2016 Posted by Andy McCarron
National lottery operator fined for 'fraudulent' 2009 payout

UK National Lottery operator Camelot has decided not to contest a record £3m fine for mistakenly paying out on a potentially fraudulent ticket back in 2009.

The fine was handed to it after an investigation by the Gambling Commission, which argued that confidence in the lottery’s integrity could be shaken and money for good causes lost.

Despite the fact that the regulator said it couldn’t be sure that fraud had taken place, the lottery operator has taken its punishment. “Camelot has accepted the Commission’s conclusions,” it said.

“Furthermore, when this matter came to light Camelot immediately took action to ensure a similar issue could not occur and commissioned external assurance of its controls and processes around prize payouts. Key changes to strengthen these processes have now been implemented.”

The fine followed an in-depth investigation relating to an allegation that a fraudulent National Lottery prize claim had been made and paid out in 2009, but which only came to light last year and was then immediately brought to the attention of the Commission and the Police.

The Commission found that Camelot had breached the terms of its operating licence in three key aspects: 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.

Surprisingly the regulator did not find a smoking gun as it admitted that ‘it could not be certain’ a fraud had taken place. However it seemed confident in its judgment that it was more likely than not that a fraudulent prize claim had been made and paid out and the fact Camelot has accepted the findings and will not be exercising its right to appeal the regulatory decision suggests it is correct.

The record £3m penalty package has been paid by Camelot and is for the benefit of good causes. This includes £2.5million to represent the amount that would have been received by good causes had the prize claim not been paid.

The good news for Camelot is that the investigation suggested this was a one-off and ‘did not uncover systemic failings of the kind that would call into question other prize payouts’.

Commission CEO Sarah Harrison 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.”

Totally Gaming says: This is a bit of a landmark decision for both Camelot and the Gambling Commission, which has not handed out a fine of this size before. This summer Camelot was issued a £300,000 fine for the display of inaccurate results on its website, but before then the only fine it had was for £100,000 back in 2014 for miscalculating a lotto prize amount. Given its monopoly operating status in the UK, Camelot is held to higher standards than the rest of the gambling industry and unfortunately for the company that means harsher fines when things do go wrong.

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