Ontario's watchdog to probe lottery corporation

Last Updated: Friday, October 27, 2006 | 5:55 AM ET

CBC News

Ontario's watchdog is launching an independent investigation into how the province's lottery corporation protects the public from theft and fraud.

The move by the ombudsman's office comes a day after CBC's The Fifth Estate aired a report questioning the suspicious number of retailers and clerks who have won lotteries.

Ombudsman André Marin said the public and provincial politicians were shocked by the allegations in the report.

"They were gobsmacked," he said. "They are very surprised to see that an organization which trumpets its system, its principles of integrity and its monitoring be subject to these kinds of allegations."

The Fifth Estate reported that retailers in Ontario won large prizes nearly 200 times in the past seven years. There are roughly 60,000 lottery ticket sellers in Ontario.

A University of Toronto statistician, who crunched the numbers for the television show, said the chance of retailers winning that often is "about one chance in a trillion, trillion, trillion, trillion," and estimated the number of wins should be closer to 57.

The report focused on the story of 82-year-old Bob Edmonds, whose $250,000 winning Encore ticket was stolen by clerks in the small town of Coboconk, Ont., in 2001 when they pretended the ticket belonged to them.

The Ontario Lottery and Gaming Corp. refused to admit the ticket rightly belonged to Edmonds, prompting the man to start a lawsuit.

'A lot of questions'

"I have the same reaction as the rest of the public — I'm left with a lot of questions and that's why I'm going to be seeking out answers," said Marin.

He announced Thursday afternoon that his office will launch a systemic investigation into how the OLG responds to complaints from customers and what mechanisms are in place to protect them.

OLG CEO Duncan Brown said in a statement he was confident the investigation would show that security for Ontario's lottery programs was among the most stringent in North America.

He also said Edmonds had been released from the terms of a confidentiality agreement he signed in order to remove any barriers to the ombudsman's investigation.

"This was a regrettable situation that should not have occurred, and one which was clearly unacceptable to everyone involved, and I have spoken with Mr. Edmonds and offered him a personal apology," Brown said.

Edmonds confirmed to the CBC that Brown had called to apologize and had also offered a free weekend at an Ontario casino of his choice. Edmonds said he wasn't sure if he'd take the CEO up on the offer and that he's never been to a casino.

The ombudsman is inviting members of the public to come forward with their stories of how the OLG dealt with them.

What the investigation won't do, Marin noted, is examine whether or not individual ticket holders won a lottery.

Marin said the allegations against the OLG are of concern because of the large amount of money the government agency rakes in and the importance of trust in its relations with customers.

"People say lotteries are a game of chance," he said. "I think that they're not a game of chance. They're a game of trust.

"Members of the public fork out on a very frequent basis a lot of money, not with the trust that they're going to win, but with that the one with the right numbers will win, not an insider," he added.

Internal review

David Caplan, Ontario's minister of public infrastructure, ordered an internal review of the OLG on Wednesday, but was criticized for not taking it a step further by requesting that an independent body look into the allegations.

Marin speculated at a news conference Thursday that perhaps if Ontario had done more, the ombudsman's office would not have stepped in.

The OLG was notified by the office early Thursday afternoon that Marin would be conducting an investigation into recent complaints.

Marin expects to report on his findings in three months.

Meanwhile, the controversy in Ontario has caused gaming officials elsewhere in Canada to assure the public there is no chance of manipulation.

Reviewing wins

A Western Canada Lottery Corp. spokeswoman said a review of 53 recent million-dollar-winning tickets revealed two wins by people associated with retailers, one of the wins being from a scratch ticket.

Kathleen Polyak added that ticket retailers haven't been collecting an outsized share of prizes.

"We have been getting media requests to have that statistic," Polyak said. "We haven't had any discussions about it yet, but that's not to say we won't."

The Atlantic Lottery Corp. (ALC) said it was "reaffirming" its security policies related to retailer lottery wins by conducting an internal review.

"We have full confidence in Nova Scotia retailers and in ALC's stringent security systems, but in light of media reports of problems in Ontario we want to be proactive in ensuring that our policies and procedures are the best in the country," said Marie Mullally, president and chief executive officer of Nova Scotia Gaming Corp.