How we regulate the National Lottery
We regulate the National Lottery to ensure that:
- players are treated fairly
- the nation’s interest in the Lottery is protected
- the operator is motivated to maximise the enjoyment and benefits that the Lottery brings to the Nation.
Our statutory duties are to:
- ensure that the National Lottery, and every lottery that forms a part of it, is run with all due propriety
- ensure that the interests of every participant in the Lottery are protected
- subject to these two duties, to do our best in making sure that the proceeds of the National Lottery are as great as possible.
Licensing National Lottery games
The current operator is Camelot UK Lotteries Limited. We awarded a ten year licence to Camelot on 1 February 2009. This licence was extended to 2023 in March 2012.
We oversee the procedures used by Camelot to ensure that the integrity of National Lottery games is maintained. We also commission and publish independent research to confirm that there is no evidence of non-randomness in the results of National Lottery games.
We grant licences for each game, or class of games, promoted as part of the National Lottery. Lotto, Thunderball, scratchcards and interactive instant win games all have their own licences.
Before we will approve any changes and allow amendments to the game licence or licence additional games we look at issues like:
- player protection
- projected returns to good causes
- protecting player funds
- impact on the National Lottery brand and intellectual property.
We check that Camelot complies with the terms of those licences.
Protecting National Lottery players
Protecting players is central to all that we do. Some of the important things we do to protect players are:
- ensuring that Camelot pays prizes promptly
- protecting against possible fraud, by checking that Camelot implements appropriate security procedures to verify the identity of winners who claim prizes of more than £50,000
- undertaking checks to ensure that Camelot protects the anonymity of winners, in line with its licence requirement
- approving the rules and procedures for each game
- making sure that clear information is available to players, including information on the games available, how to play then and how to claim prizes
- agreeing performance standards with Camelot for the services it provides to players
- handling complaints if a player is unhappy with the service they have received from Camelot after they have exhausted Camelot’s complaints procedures
- ensuring that there are controls in place to protect against excessive play
- ensuring that there are controls in place to protect against underage play
- providing information to the public about lottery scams.
Ensuring National Lottery draws are fair
We ensure that all draws are fair, random and honest. There are rigorous procedures which govern the way in which National Lottery draws are carried out. Every draw is overseen by an independent adjudicator who confirms that the draw is carried out correctly.
Members of our compliance team attend at least one Wednesday draw, one Saturday draw and one Friday draw each quarter.
Camelot is required to carry out periodic tests of both draw machines and ball sets to check for any evidence of non-randomness. Camelot tests the machines periodically, and gets the University of Hertfordshire to do the independent testing on statistical analysis of randomness of balls drawn. The draw is totally random and each ball has the same chance of being selected.
The machine and ball set used in each draw are chosen at random on the day of the draw. The selection possibilities are put in envelopes, shuffled and chosen by an independent onlooker.
In between draws, the draw machines and ball sets are sealed and kept in secure storage. Access to these secure areas is strictly limited. The seals are checked before a set of balls is used.
Each set of balls is tested by the National Measurement Office and Camelot at regular intervals. In addition, each draw machine is tested at set intervals to ensure that it is working properly and that the ball selections are totally random.
A member of Camelot staff called the ‘Draw Manager’ starts the draw. The Draw Manager is responsible for making sure the draw runs properly.
The independent adjudicator confirms that the draw is honest and fair. They are responsible for making sure that the draws are carried out in accordance with the rigorous procedures.
Ensuring National Lottery scratchcard security
We ensure that Camelot has rigorous security arrangements in place for the printing, storage and distribution of National Lottery scratchcards. We also check that they make sure that their scratchcard suppliers have appropriate security arrangements in place.
In addition to our monitoring, an independent auditor conducts audits on every scratchcard game and the scratchcards undergo independent laboratory testing to ensure that they are tamper-proof.
We also make sure Camelot has robust information security policies in place to prevent fraudulent attempts to collect prizes.
Independent verification of systems
We monitor the reliability, security and efficiency of the National Lottery’s central computer systems and network of terminals.
We operate an independent verification system, which processes and reports the National Lottery financial data at player transaction level. The system allows us to agree sales figures and prize payouts daily and to make sure the number of winners and prize amounts are correct after each draw. It also enables us to confirm that money due to good causes is correctly calculated.
We investigate any discrepancies between the operator’s system and our own.
Overseeing the transfer of funds
We oversee the transfer of funds to good causes and to prize winners.
Money for good causes
The proportion of National Lottery income that goes to good causes is transferred from the operator to the National Lottery Distribution Fund (NLDF) or the Olympic Lottery Distribution Fund (OLDF).
We make sure that Camelot’s payments are complete, accurate and on time.
Money for prizes
There are different prize levels for different games, but on average, approximately 50% of National Lottery sales are given out as prizes. It is a requirement of the licence that they transfer prize money into the Players Trust, to keep it secure and separate from other funds.
Once in trust, these funds are under the control of an independent trustee. We review all payments that Camelot makes to the trust.
We check that prizes unclaimed by winners are transferred to the NLDF and OLDF as appropriate. These are prizes that have not been claimed within 180 days after the draw, if a draw-based game, or 180 days from the close of the game for scratchcards.
Statement of assurance
Each year, we produce a statement of assurance for the Department for Culture, Media and Sport (DCMS). This confirms that all NLDF and OLDF payments are accurate and complete.
Vetting of the operator and its suppliers
We undertake checks on individuals whose conduct could impact on the running or reputation of the National Lottery. Similarly, we also undertake checks on companies if their conduct could affect the National Lottery. We call these checks ‘fit and proper vetting’.
If we find that any individual does not meet the necessary standards, they may not be employed in a vetted role. We vet:
- Camelot’s directors
- Camelot’s shareholders
- Certain Camelot employees
- Key contractors and third party suppliers.
People or companies being vetted are required to complete an individual or corporate declaration and a Disclosure Application form for Disclosure Scotland. We will then make enquiries with a range of agencies in the UK and, where appropriate, overseas, to verify the information given.
Protecting the National Lottery brand
The National Lottery brand (which comprises of the crossed fingers and game logos) is one of the most recognised brands in the UK. We own the trademarks in the logos and license them to the operator, Camelot UK Lotteries Limited.
One of the conditions for use of the brand is that Camelot is required to take appropriate action if the National Lottery brand is being used inappropriately.
We also grant distributing rights to use a version of the crossed fingers logo to be displayed on Lottery funded projects all over the UK to help people to identify where the National Lottery has had a positive impact on local communities.