National Lottery operator Camelot has been fined £3 million by the gambling watchdog after an allegation of fraud involving a National Lottery prize paid out in 2009.
The Gambling Commission issued the penalty after they concluded that it was it was likely a fraudulent prize claim had been made in an incident involving a "deliberately damaged ticket".
The police and regulator were made aware of the alleged fraud by Camelot in 2015, a Camelot statement said.
A £2,525,485 jackpot from a draw on March 11 2009 went unclaimed until shortly before the September 7 deadline the same year, according to news reports at the time.
The Gambling Commission, who would not confirm how much Camelot had paid out, said the £3 million penalty included the money good causes would have received had the prize claim not been paid.
The winning ticket was reported to have been bought in Worcestershire.
The commission ruled that Camelot breached the terms of its operating licence over control of its databases, the way it investigated prize claims and its processes "around the decision to pay a prize".
Camelot chief executive Andy Duncan said: "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."
The Gambling Commission said Camelot had already taken steps to ensure a similar problem would not happen again.
The watchdog's chief executive, Sarah Harrison, said "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."
The police confirmed earlier this year that they would be taking no further action following their own investigation.
Mr 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."
A spokesperson for Hertfordshire Police said: "An allegation of fraud connected to a lottery win from 2009 was investigated by Hertfordshire Constabulary’s specialist Cyber and Financial Investigation Unit working with the Gambling Commission.
"As part of the investigation a man was arrested on suspicion of fraud by false representation. Following a thorough investigation the man was released with no further action to be taken against him."