Posted by Woods Whur | Gambling

On 28 July, the Gambling Commission announced that it had fined Camelot, the operator of the National Lottery, £300,000 for undermining public confidence.

The Commission has been responsible for licensing and regulating the National Lottery since 1 October 2013, when it merged with the National Lottery Commission. No change to the legislation under which the Lottery is regulated occurred, however, and this remains the Lottery Acts of 1993, 1998 and 2006, the Horserace Betting and Olympic Lottery Act 2004 and various Statutory Instruments made under those pieces of legislation.

The National Lottery’s regulator was initially the Director General of the Office of the National Lottery, or OFLT. However, this changed in 1998, with the dissolution of that body and the establishment of the National Lotteries Commission. It has been the intention, since the drafting of the Gambling Act 2005, that the Gambling Commission would take over its powers and responsibilities.

A full record of all breaches by, and regulatory action taken in respect of, the National Lottery is available to view from a link on the Commission’s website, and makes for an interesting read: http://www.natlotcomm.gov.uk/regulating-the-lottery/enforcement/licence-breaches.html

Records are kept going back to 2002, during the currency of the second licence granted, and are broken down into individual financial years. The current licence is the third, and there have been some eleven breaches since it was awarded: three in 2009/2010, two in 2010/2011, two in 2013/2014, one in 2014/2015 and three so far in 2016/2017. They relate to matters as diverse as numbers on tickets not being consistent with those entered into a draw, prizes being incorrectly attributed to tickets, prizes being miscalculated, failures in updating the Prize Payment Security System, incorrect draw results featuring on the website, errors in scratchcards and interactive instant win games, and inadequate information being given on promotional material.

The Gambling Commission has taken over the same regulatory priorities and imperatives previously applied by the National Lotteries Commission. Protecting players is central. The Commission oversees the procedures used by Camelot to ensure the integrity of games and the security of scratchcards. It conducts independent research to confirm that there is no evidence of non-randomness of games, and monitors the reliability, security and efficiency of the National Lottery’s central computer systems and national network of terminals. The Commission also conducts “fit and proper vetting” of Camelot’s suppliers and oversees the transfer of funds to good causes.

In relation to all licence breaches dating back to 2009, this is only the second time that a financial penalty has been imposed – the other was in respect of a licence breach recorded on 26 August 2014, which arose because Camelot incorrectly calculated the Lotto jackpot prize tier such that the three winners of the jackpot prize in the draw held on Saturday 19 October 2013 shared £4.8m instead of the originally broadcast sum of £6.2m – a significant discrepancy. On that occasion, Camelot was fined £100,000.

In every other case, the Commission has been satisfied that Camelot’s policies, procedures and systems had been updated or fixed so as to prevent any recurrence of the problem, and therefore contented itself with recording a licence breach and taking no further action.

The recent findings relate to three separate incidents. First, following the Lotto draw on 10 October 2015, Camelot published the incorrect Millionaire Maker Raffle results on its website for an hour. This resulted in over 100,00 players who viewed them being misled. Then, on 5 November 2015, an incorrect jackpot advertisement was placed on the EuroMillions results checker page, stating that there were ten prizes of £1 million available, instead of one. Later, on 27 December 2015, the incorrect prize information for the Lotto Raffle top tier prize winners was published on the EuroMillions website, including a reference to “5 prizes at £20,000” which should have read “5 prizes at £1 million”. Again, on both of these occasions, players had been misled.

It would appear from the Commission’s recording and reporting of these breaches that the £300,000 fine has been imposed in respect of the first of them only, the one that occurred on 10 October 2015. For the others, the Commission has merely recorded a breach.

Camelot must now pay the £300,000 to good causes. Both incidences of financial penalties being imposed during the currency of the third licence have occurred since the Gambling Commission took over responsibility for regulating the National Lottery operator, and for breaches that were committed since that date. Only an examination of future years’ data will reveal whether or not this represents a harsher line being taken than was the case previously.