Prize Payment Security System

Background

As operator of the National Lottery, Camelot is required to put in place arrangements to ensure the security of funds for players who have entered National Lottery games and prizes for the winners of those games as well as security for the funds which are due to be paid to the good causes. These arrangements take the form of the Players’ Trust which is overseen by an independent Trustee.

Camelot is also required to put in place arrangements such that (for example if Camelot became insolvent) the trustee or any receiver appointed by the Trustee would be able to properly discharge their duties (for example by repaying funds to players or paying prize winners). These arrangements are known as the Prize Payment Security System (PPSS).

The specification and functionality of PPSS is set out in a document which is approved by the Commission and must be complied with by Camelot.

Condition

Condition 5.12B(h) of the Third Licence to operate the National Lottery, granted under section 5 of the National Lottery etc. Act 1993 (as amended) requires that approved procedures must be complied with.

Description

In March 2009 Camelot made changes to the National Lottery gaming system, however it failed to make compatible changes to PPSS. As a consequence for the period 4 March 2009 to 12 May 2009 PPSS would not have been able to perform as expected. Had circumstances arisen which would have required the operation of PPSS, for example if Camelot had become insolvent during the period, the Trustee’s ability to perform its
functions would have been compromised, with potentially serious consequences.

Regulatory action

The Commission has considered the circumstances which led to this failure. It has noted that Camelot accepts that the PPSS arrangements are an important measure required by the Commission to protect players’ interests and regrets that the error occurred. Camelot also explained that the failure was due to an error by a third party carrying out the system changes.

The Commission has concluded that there was a breach of Condition 5.12B (h). The licence breach was recorded on 23 November 2009

Outcome

The problem with PPSS was fixed in May 2009.