Ombudsman Ontario

Ombudsman Ontario

September 14, 2009 15:28 ET

Ombudsman Applauds Restrictions on Lottery Ticker Retailer Play

TORONTO, ONTARIO--(Marketwire - Sept. 14, 2009) -

ATTENTION NEWS EDITORS:

Ontario Ombudsman Andre Marin today welcomed the announcement by the provincial government and the Ontario Lottery and Gaming Corporation (OLG) that will ban retailers from buying lottery tickets in their own stores as of Nov. 3.

The move comes after Mr. Marin warned the OLG in February that he was considering recommending such a ban if it did not take steps to manage the "itchy fingers" of some retailers. At that time, an OLG audit revealed that "insiders" (retailers and employees) had won $198 million in lottery prizes in the past 13 years - almost double what had been originally estimated.

"There's a point where enough is enough," Mr. Marin said, noting that policing retailers had become "a growth industry," costing millions in public funds. "The OLG's business is to provide a trustworthy system for citizens to play the lotteries and to bring in revenues for our hospitals, schools and communities."

The limited ban is "an inexpensive and practical solution" to the insider win problem that will make Ontario's lottery security system the most stringent in Canada, the Ombudsman added. "After we nudged the OLG forward on this issue, the government stepped in and made the right decision - I congratulate them for that."

The Ombudsman launched an investigation into the OLG's protection of the public from theft and fraud in October 2006 in the wake of news reports indicating retailers were winning more than their fair share of lottery prizes. The investigation sparked major reforms, he noted.

"When we first investigated the OLG, the corporate culture was 'hold your nose and give the fraudster the cheque.' They didn't know how many retailers there were or how much they were winning. Lotteries weren't regulated and players who suspected fraud were brushed off with 'buyer beware,'" he said.

"But today, all of my recommendations have been implemented - and then some. Now you have to sign your ticket, you can check it yourself to see if you won, lotteries are regulated, retailers are registered and subject to a code of conduct, and insider wins are investigated. The OLG has come a long way."

At the time of the Ombudsman's investigation, no other government-run lottery banned its retailers from playing. A similar investigation by the B.C. Ombudsman later in 2007 prompted that province to implement a ban on retailers playing in their own stores, but Ontario's new rules will apparently be stricter, with stiffer penalties and no prize payouts for retailers who break them, the Ombudsman noted.

The case has attracted worldwide attention and sparked investigations in several other jurisdictions in Canada and the U.S., where similar "insider win" problems have also been revealed.

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