BC - “Lotteries minister failed the public - Ombudsman reveals scant fraud protection from B.C. Lotteries or government watchdog”
Times Colonist, Wednesday, May 30, 2007
The province’s ombudsman has delivered a devastating report into a near total failure by B.C. Lotteries to protect players from being cheated when they attempted to claim prizes
Worse, the report found that once concerns were raised, the lottery corporation and the Solicitor General’s Ministry both released inaccurate information, downplaying continued serious risks of fraud and theft.
It is a damning report.
The ombudsman found B.C. Lotteries had no effective procedures to protect gamblers from being cheated when they went to redeem tickets. A dishonest retailer could say a ticket was worthless and then later claim the money himself. The corporation made no real effort to ensure honest treatment for gamblers. Instead, it relied on customers to catch cheating retailers. Even when customers complained to B.C. Lotteries, their reports were routinely ignored.
And this was happening even though senior corporation management had been warned repeatedly since 2002 of increasing concerns about retailer fraud.
B.C. Lotteries’ purpose is to increase gambling losses. While its lack of interest in protecting the public is still surprising, given the risk of long-term damage to the business, its focus is sales.
But the Gaming Policy and Enforcement Branch, part of the Solicitor General’s Ministry, is responsible for protecting the public. It failed miserably, according to the ombudsman’s report. The ombudsman found the branch did not conduct a single investigation into the integrity of the lottery corporation’s retail network.
While the law requires the branch to be notified of every instance of suspected fraudulent activity, it never asked why it was not informed of a single case between 2002 and 2006.
These failures can perhaps all be explained through incompetence.
But the ombudsman’s office also looked at their actions after a Vancouver Sun report late last year revealed potential fraud by retailers.
B.C. Lotteries, the gaming enforcement branch and Solicitor General John Les responded by saying there was no reason for concern.
“In the past few years, the B.C. Lottery Corp. has received only 74 complaints about lottery ticket validation concerns and those were all fully investigated and resolved,” Les said. “When a retailer claimed a prize, a detailed investigation was conducted.”
That was not true. The ombudsman calculates the real number of complaints was much higher. And there was no investigation in 99 per cent of the cases in which retailers claimed prizes.
B.C. Lotteries said retailers weren’t claiming more than their share of prizes. The investigation found it had no credible basis for that claim.
The Gaming Policy and Enforcement Branch announced it had investigated and reviewed the 74 files provided by B.C. Lotteries. It said the lottery corporation had handled the cases appropriately. But when the ombudsman asked for details two months later, the enforcement branch reported it had not yet even received the complete files.
And in fact, the ombudsman found, the enforcement branch appeared more interested in reassuring the public than getting at the facts. “The depth of the investigation and the fact that a number of disquieting pieces of information were toned down or left out contributes to this result,” the ombudsman notes. The branch — responsible for the integrity of gambling — relied on assurances from the corporation. It uncovered none of the problems that the ombudsman readily found.
Les said yesterday the government accepts the ombudsman’s 27 recommendations and will order an independent audit of the lottery corporation.
But so far, there has been no accountability. No one in corporation management, on the B.C. Lotteries’ board or in the Solicitor General’s Ministry has acknowledged mismanagement. Les has not accepted any responsibility as minister.
When the Liberals abandoned their promise to halt the expansion of gambling in 2002, they insisted the public would be protected by a stringent set of rules and a competent, adequately funded enforcement branch.
The ombudsman’s investigation into this one small area has proved that was a false claim. The public now must wonder how much else has gone wrong in the rush to expand gambling in B.C.
© Times Colonist (Victoria) 2007
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