Camelot hit with £3m fine for “fraudulent pay-out”

The Gambling Commission has fined Camelot £3m for a failure in its fraud-detection system that led to the operator paying out to a “fake” winner in 2009.

The ruling follows an in-depth investigation of the incident, which was brought to the attention of the Commission and the police last year.

The Commission said its investigation found it was “more likely than not that a fraudulent prize claim had been made and paid out” thanks to a deliberately damaged ticket.

Camelot would not give further details about the fraud thanks to an ongoing police investigation.

Regardless, the Commission ruled that Camelot had breached the terms of its operating licence in the way it investigated the prize claim and its decision to pay out.

“The Gambling Commission’s chief concern is to ensure the National Lottery is run with integrity and that player interests are protected,” said Commission CEO Sarah Harrison.

“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.”

The £3m penalty package has already been paid by Camelot and will go towards good causes.

The fine includes £2.5m to represent the amount that would have been received by good causes had the prize claim not been paid.

Camelot were quick to point out that the incident was a one-off and did not affect the integrity of the lottery going forward.

The firm said in a statement: “Our internal fraud detection and prevention processes have evolved considerably over time, and we have strengthened them still further following this review.

“We are completely confident that the alleged fraud could only have been carried out under a unique set of circumstances and would certainly not be possible today.”

Camelot CEO Andy Duncan added: “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.”

It has been a rocky couple of months for Camelot, after the operator had 26,000 accounts hacked in late November, while its app was down for a month-long period after a technical issue saw it incorrectly identify winning tickets as losers.

In July, Camelot was also hit with a £300,000 fine for providing inaccurate results on its National Lottery site, an error the Gambling Commission said placed “public confidence at risk”.