Labour has demanded an explanation from the government about the circumstances that led to National Lottery operator Camelot receiving a £3m penalty for paying out on a damaged ticket in 2009.
The Gambling Commission said the situation only came to light last year and that the whole penalty will be given to good causes – £500,000 on top of the £2.5m they would have received had the prize claim not been paid.
Camelot has apologised but Tom Watson, the shadow culture secretary, said: “Camelot has very serious questions to answer about this fraud, which should never have been allowed to take place. So too do ministers.”
He said the culture, media and sport secretary, Karen Bradley, had been asked on Thursday about security breaches at the National Lottery. “She failed to offer assurance that the government is taking steps to improve it,” said Watson.
“Thousands of organisations rely on money from the National Lottery and the millions of people who play it are right to expect that the rules of the game are fair,” he added.
Watson has written to Bradley, setting out 10 questions including when ministers were made aware of the case and what action is under way to recover any money paid out.
“The government must now make an urgent statement about the great Lotto robbery,” he said.
The Gambling Commission, which has fined Camelot twice before, said its investigation “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 paid the penalty imposed by the commission and said that it was not connected to the draws for the winning numbers, but to do with its system for preventing fraudulent claims on a deliberately damaged ticket. It described the incident as “unique”.
The company would not comment on a report by ITV that a £2.5m draw from March 2009 from a winning ticket sold in Worcestershire had gone unclaimed until close to the September deadline for claiming a prize.
The commission’s chief executive, Sarah Harrison, said its main concern was to ensure the National Lottery was run with integrity and that players’ interests were protected.
“Camelot’s failures in this case are serious and the penalty package reflects this,” she said. “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.”
Andy Duncan, the chief executive of Camelot, said the lottery operator admitted mistakes had been made. “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,” he said.
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 was not immediately apparent where the £2.5m prize payout ended up. Herfordshire police said it had closed its investigation. “An allegation of fraud connected to a lottery win from 2009 was investigated by Hertfordshire constabulary’s specialist cyber and financial investigation unit working with the Gambling Commission. As part of the investigation a man was arrested on suspicion of fraud by false representation. Following a thorough investigation the man was released with no further action to be taken against him,” the police said.
A Department for Culture, Media and Sport spokesperson said: “The integrity of the National Lottery is absolutely paramount and it is crucial that both players and returns to good causes are protected and not at risk from fraudulent activity. It is right that the Gambling Commission has acted in this case and assured us that Camelot has put controls in place to mitigate against any similar licence breach in the future.”
This is the largest penalty that has been imposed on Camelot to date. In July, it was fined £300,000 after inaccurate Lotto Millionaire Raffle results were published on the National Lottery website for an hour and more than 100,000 people viewed them. In 2014, it was fined £100,000 for miscalculating a National Lottery Lotto jackpot prize.
Source: The Guardian
