Do you buy lottery tickets? If you do, you might be interested to learn about PayDay where tickets are sold even after the prizes have been awarded. Business Columnist Michael Hlinka is here to explain how this could possibly happen.

There’s a weekly lottery in Ontario called PayDay. Here’s how it works. For a two dollar ticket, you have a chance to win one of two prizes - a thousand dollars a day for a year, a total benefit of three hundred and sixty-five thousand dollars or a thousand dollars a week for life. But here’s what the Lottery Corporation wasn’t telling anyone. After the first prize was awarded - that is, the three hundred and sixty-five thousand - they kept selling tickets without notifying the unwitting public. And this made some people howl with outrage when there’s something so much more outrageous to be howling about in the first place!

First, a couple of words about the Ontario Lottery and Gaming Corporation. Created in 2000, it’s a Provincial Agency that is responsible for managing province-wide lotteries, casinos and slot facilities at horse racing tracks. To my understanding, there are similar organizations in most of the provinces across Canada. In its own oh-so self-serving words: "Our purpose is to make life better for people across Ontario by generating revenue provincially and economic and social benefits locally."  Yes, that is one interpretation. Another description might be that it is a government-mandated monopoly whose high-handed tactics just wouldn’t cut it in a competitive business environment.

Let me get back to PayDay. My guess is that the overwhelming majority of people who bought tickets had no idea that they might not qualify for one of the top prizes. And the defense offered by the corporation is so mealy-mouthed: There is a one eight hundred number that anyone can call to tell you if any of the top prizes have been awarded yet. And, of course, the only reason that the Ontario Lottery Corporation can get away with it is because there’s no where else to turn, you can’t get your lottery tickets anywhere else. Of course, maybe this isn’t such a bad thing. Because for every dollar collected in lottery tickets, the Corporation pays out seventy cents in winnings.

Which is why Lottery Corporations are so beloved by the political elites. Last year in Ontario, its Net Profit Margin was thirty percent. In other words, a two-dollar PayDay ticket contributed sixty cents to the public purse. Remember how outraged everyone was last year by the profits the oil companies raked in? In 2005, Petro-Canada’s Net Profit Margin was ten percent - these guys are pikers compared to the Lottos. And if you find this outrageous, there’s only one proper response: Put the Lotteries out of business. Put ‘em out of business by not buying their products.

I’m Michael Hlinka

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