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The Gambling Commission has imposed a financial penalty of £3 million on Camelot, the operator of the National Lottery. 

This follows 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. 

The Commission’s investigation into this issue found that, whilst 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 will not be exercising its right to appeal the regulatory decision. 

The £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 Commission’s investigation has established that the circumstances of this case were specific and did not uncover systemic failings of the kind that would call into question other prize payouts. 

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. 

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.” 

Details of the Commission’s decision are available

Notes to editors 

  1. View decision document related to this case.
  2. The Commission’s duty with respect to the National Lottery is to ensure it is fair and safe for consumers, that it is run with all due propriety and, subject to that, maximises contributions to good causes.
  3. The Commission has the power to run the competition process to select the operator of the Lottery and make sure that the operator meets the conditions of the licence. Where necessary we also have the power to take legal action should the operator be found in breach of the conditions of the licence. This includes the power to implement financial penalties or licence withdrawal. 
  4. Since its launch in 1994 the National Lottery has raised more than £36billion for good causes including sports, community and heritage projects across Britain. 
  5. The financial penalty of £3million has been paid for the benefit of good causes. 
  6. During the financial year 2015/2016, over £4billion in prizes has been successfully paid out to players. 
  7. Journalists can contact our press office on 0121 230 6700 or email: communications@gamblingcommission.gov.uk
Posted on 16 December 2016