UK Gambling Commission (GC) has imposed a fine of £3m on Camelot, operator of the National Lottery, after an investigation into allegations of a fraudulent prize claim and payout.

The penalty comes in the wake of an investigation into a fraudulent National Lottery Prize claim, allegedly made and paid out in 2009.

The alleged incident only came to light in 2015, with the police and the GC immediately made aware.

The GC investigation found that while it could not be certain that fraud had taken place, it was more likely than not that a fraudulent prize claim had been paid out.

In its findings, the GC stated that Camelot breached its operating licence in three key areas: Its controls relating to databases and other information sources, the way it investigated a prize claim, and its processes around the decision to pay a prize.

It did stress, however, that the event was specific and a one off, with its investigation uncovering nothing in the way of systemic failings on Camelot’s part.

Chief Executive of the GC, Sarah Harrison, said: “The Gambling Commission’s chief concern is to ensure the National Lottery is run with integrity and that player interests are protected.

“Camelot's failures in this case are serious and the penalty package reflects this. 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.”

Camelot CEO Andy Duncan said: “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.

“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. We welcome the Gambling Commission’s confirmation that this is the case.”