Canadian Lottery in Trouble

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Canadian Lottery in Trouble

TORONTO -- Yesterday marked the arrival of a critical report on Ontario's government-run lottery corporation, The Associated Press reported. Ombudsman Andre Marin released the report on an investigation into the Ontario Lottery and Gaming Corp. (OLG), which found that the agency paid out tens of millions of dollars to retailers that made fraudulent claims, and ignored customer claims of being scammed.

"The OLG has turned a blind eye to allegations of crime for many years," Marin told a news conference. "There's likely in the area of tens of millions of dollars that have been paid to unscrupulous retailers."

Rita Zivontsis, co-owner of a convenience store in Toronto for 34 years, told the Canadian Press if there is a fraud problem it likely can be traced to "a few bad apples."

The OLG was "fixated on profit rather than public service," he said, and "turtled" when initial allegations of fraud were released. In addition, he criticized the lottery for failing to keep track of the number of retailers it has and the number that claimed jackpots. Customer complaints were rarely taken seriously, Marin said and described the agency's complaint department as "rude and inept."

Marin's report was prompted by allegations in another report that lottery retailers win a disproportionate number of prizes, a Canadian Press report stated.

Marin stated that wins by retail insiders kept increasing. In 2005, there were 31 insider wins, three of which were worth more than $862,000, the AP reported.

He added that lottery officials who raised concerns about suspect claims by retailers in 2003 and 2004 -- including one $10.8 million prize -- were told by then CEO Duncan Brown: "Sometimes you hold your nose."

Brown resigned last week from his position as CEO, the report stated.

Zivontsis said she is interested in the recommendations in Monday's report but said Brown's resignation is irrelevant. "The CEO, what can he do? He's the one that gets the bad rap, but he's not at all the stores, he cannot check (them all),” she said.

"Ensuring the integrity of lotteries is our number one priority," said Ontario's Government Services Minister Gerry Phillips. "We will adopt and implement the ombudsman's recommendations, including having the AGCO [Alcohol and Gaming Commission] take over the regulation of lottery tickets."

Ontario is not the only Canadian province that is investigating its lottery corporations.

New Brunswick's ombudsman is researching a potential probe into Atlantic Lottery Corp., after an internal report revealed retailers won prizes exceeding $25,000 --10 per cent more often than statistically probable -- over a six-year period, the report stated.

Another investigation was launched in British Columbia after its lottery corporation found retailers were winning six times more than the general public.