Funding of the Equalisation Trust Account

Condition breached
Condition 17(12)(b) of the Section 5 licence

Description
In December 2004 Camelot allowed the balance of the Equalisation Trust Account to fall below £4 million, contrary to licence requirements.

Background
The Equalisation Trust Account is the account established by the trustee into which Camelot pays equalisation payments.  Equalisation payments are either amounts equal to the aggregate of the products of multiplying all sales revenues in respect of each type of fixed prized game by the relevant fixed payout percentage and/or the amount by which the Camelot Actual Fixed Prize Liability is less than the Camelot Target Aggregate Fixed Prize Liability.  The mechanism minimises the risk of loss to the operator associated with fixed prize Games whilst not passing the risk to the National Lottery Distribution Fund.

Regulatory action
Camelot reported its error to the Commission in December 2004.  A licence breach was recorded on 7 February 2004.

Outcome
Camelot has now put in place improved control measures to avoid any similar incidents arising in the future.