Ontario ombudsman hands over lottery investigation to police

Tuesday, March 27, 2007

At a news conference in Toronto, Canada on March 26, 2007, Ontario Ombudsman André Marin called on the provincial government to transfer regulation of its lottery system from the Ontario Lottery and Gaming Corporation (OLG) to the Alcohol and Gaming Commission of Ontario. This request follows an investigation the ombudsman's office undertook, 3 months ago, into the allegations of theft and fraud carried out by ticket retailers.

The results of the investigation into the allegations were detailed in Marin's report, entitled A Game of Trust, released earlier in the day. The OLG has been ordered to transfer relevant files over to the Ontario Provincial Police, to determine whether a criminal investigation is warranted.

"The OLG is fixated on profit rather than on public service," Marin suggested in his opening statement. "It is too close to its retailers, who are not just its frontline sales force but some of its best customers," he continued. "It has lost sight of the fact that it is supposed to be a guardian of the public trust."

The investigation was launched by Marin at his own intitiative, rather than in response to an individual complaint. Ombudsman investigators looked into the case of Bob Edmonds, a 78-year-old man who was cheated out of a CA$250,000 winning ticket by an unscrupulous retailer, as highlighted in a CBC television exposé. Over the course of the investigation, the Ombudsman’s Office received more than 400 other complaints related to OLG.

Insiders have been winning big lottery prizes for years.

—André Marin

Marin indicated that, since 1999, "at least 247 retail owners or their employees have won major lottery prizes", some of which he acknowledged were legitimate. He also reported that the OLG paid out "millions of dollars in prizes to retailers making dishonest claims...in amounts anywhere from $250,000 to $12.5 million."

Marin found a systemic pattern of wrongdoing by some retailers, who he deemed to be the OLG's "partners in profit", with the OLG overlooking the abuse. Marin suggested that rather than get tough, "the OLG actually considered relaxing the rules on insiders."

In his report, Marin proposed 23 recommendations including a zero-tolerance policy for retailer dishonesty, an adjudicative process to deal with disputed prize claims, a retailer code of conduct and the use of “secret shoppers” to test the retailers adherence to it.

"We accept the findings of these reports and the organization is moving quickly to implement the recommendations," said OLG Board Chair Michael Gough in a news release. "OLG has learned a great deal from the Ombudsman's report. It is fair, comprehensive and thoughtful," continued Gough.

The total revenue from lotteries to the provincial government in Ontario for fiscal 2005-2006 was CA$6.36 billion. News of the resignation of OLG's CEO Duncan Brown, was reported just days before the ombudsman's report was tabled.