There a tons of articles today that highlight the Ontario ombudsman report about OLG(C) - do a search of “Marin + gambling” if you are interested in obtaining more information. The below article gives the flavour of the report. This is no suprise to me as I have heard this stuff in private - good that it is now public knowledge. ED.
KAREN HOWLETT
Globe and Mail Update
Posted AT 11:55 AM EDT ON 26/03/07
The Ontario Lottery and Gaming Corp. has “turned a blind eye” to crime and cheated money from the pockets of ordinary Canadians for years, says Ontario Ombudsman André Marin.
In his report tabled Monday, Mr. Marin calls for an independent regulator to oversee the province’s lottery corporation in the wake of “theft and fraud” by ticket retailers.
In just 90 days, the Ombudsman’s office uncovered instances where about $15-million in lottery winnings was paid to “internal fraudsters,” Mr. Marin said.
“I think the system has been cheated, charities have been cheated, hospitals have been cheated,” Mr. Marin said at a news conference on Monday.
The report says OLG must no longer be responsible for the oversight of lotteries because its “touchy-feely” relationship with the retailers who sell tickets makes the organization incapable of holding retailers to account.
The lottery corporation has “coddled” retailers even in suspicious circumstances, including paying out millions of dollars in questionable prize claims. By contrast, the report says, customers who complained were rarely taken seriously by an organization that kept poor records and conducted “spotty” investigations.
“The OLG has become fixated on profit rather than public service,” the report says. “It had come to define itself by its role as a cash cow.”
Under the current regime, the lottery corporation oversees and disciplines the very retailers it depends on for its profits. An independent regulator would better protect the public by removing this inherent conflict, the report says.
“Let [the corporation] sell lottery tickets because it does it so well, but get it out of the fraud prevention business at which it has proved itself so inept,” the report concludes.
Mr. Marin said the lottery corporation has introduced some measures to better protect consumers since his office launched an investigation last October, following a CBC television program that alleged that more than 200 ticket retailers or clerks won prizes of more than $50,000 in the past seven years. But well before the fifth estate program, the corporation was only too aware that it was easy for its retailers to steal winning tickets, the report says.
The report says the lottery corporation’s efforts to crack down on illegal activity are hampered by a corporate culture that places profits before responsibility. This culture is best summed up by an internal e-mail written by former chief executive officer Duncan Brown in response to concerns about suspicious wins by retailers. “Sometimes you hold your nose,” the email says.
Mr. Brown was forced to resign last week by the government in an effort to diffuse the controversy swirling around the lottery corporation.
In addition to independent oversight of the lottery corporation, Mr. Marin says retailers should be required to face criminal background checks when they apply for lottery terminals. He stopped short, however, of calling for a ban on retailers playing the lotteries, saying such a measure would be unworkable and unfair.
The report, titled A Game of Trust, makes 23 recommendations, including introducing a zero-tolerance policy for dishonesty by retailers, setting up an adjudicative process to deal with disputed prize claims and using secret shoppers to test the lottery corporation’s compliance with such measures. The government has agreed to adopt all of the Ombudsman’s recommendations, including independent oversight of the agency.
The Alcohol and Gaming Commission in Ontario regulates the lottery corporation’s casino and racetrack operations but not its lotteries. The commission has the power to refuse to register gaming vendors and freeze assets.
The report says the government has become “addicted” to gambling revenues to help fund health care and other programs. Last year, lottery sales grossed almost $2.4-billion.
But the revelations of a suspicious number of insider wins raised serious questions about whether the system could be trusted, the report says.
“Lotteries are a game of trust and without trust, players will simply take their marbles and go home, depriving the province of important revenue,” the report says.
The report recounts the sorry tale of senior citizen Bob Edmonds, who was cheated of his winnings by a lottery ticket retailer and waged a three-year battle with the lottery corporation after he revealed this wrong. The corporation responded to Mr. Edmonds by freezing him out, the report says. It spent $3.5-million in legal fees fighting him in court and trying to keep him quiet. The fifth estate told Mr. Edmonds’s story last fall.
“This compelling story, pitting an elderly David against a clumsy and unfeeling Goliath of a corporation, captured public attention - including my own,” Mr. Marin says.
“It made us all wonder if the corporation was not living up to its core values of ‘integrity, respect and accountability’ and operating a system that could not be trusted.”
