Camelot fined over lost-ticket payouts

As jackpots go, it is a piffling amount. But the £160,000 that the National Lottery operator, Camelot, was forced to shell out yesterday represented embarrassment on a large scale after an inquiry found the company had erroneously paid winnings to 118 ticket holders.

Junior staff at Camelot were blamed for authorising payouts – beyond a 30-day deadline – to people whose tickets had been lost, stolen or destroyed.

The National Lottery Commission investigation was launched after the case of Martyn and Kay Tott, who "won" a £3m midweek jackpot in September 2000 but could not find the ticket. They did not realise they would have to make a claim, to report that their ticket was lost, within 30 days.

They tried to convince Camelot they were owed the money but were refused. Their case hinged on the 30-day rule, within which Camelot could use its discretion to pay winnings.

After that, no claims should have been paid but the investigation found the rule had been breached on many occasions, including one time when a syndicate in Dudley was paid £132,116. The other 117 cases totalled £9,256.

Camelot has been ordered to match the total "winnings" and pay it to good causes, plus interest and a £10,000 fine.

The company has accepted it was to blame and said it would not try to recoup the winnings from the lucky beneficiaries. The fine will go to the normal good causes funds that benefit from the lottery.

Harriet Spicer, chairwoman of the commission, said: "This first imposition of a financial penalty on Camelot indicates the seriousness with which we view any breach of the licence that has potential to undermine confidence in the lottery."

Camelot said it "regrets the errors occurred and accepts the outcome of the investigation as well as the decision of the National Lottery Commission to levy a fine of £10,000. Camelot has put in place new controls and training to ensure human error is minimised."

Since the lottery was launched in November 1994, £454m in unclaimed prizes has gone to good causes.