Wednesday, February 18, 2009

Ontario Lottery and Gaming Corporation in Hot Water Again

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The forensic audit by Deloitte and Touche of the insider lottery winnings placed the Ontario Lottery and Gaming Corporation (OLG) in hot water. The audit detected that lottery retailers (sellers), OLG employees and their families took away in $198 million in prizes in the last 13 years. It is beyond the $106 million previously estimated by the OLG, reports The Toronto Star.

This figure of the defrauded prize money increased as the OLG broadened the definition of the "insiders" encompassing "family members and those living with OLG employees or lottery retailers," said the OLG's CEO Kelly McDougald.

In 2007, the Canadian Broadcasting Corporation's the "Fifth Estate" programme showed some fraudulent practices and the OLG's unwillingness to investigate the insider fraud. Late in the same year, Ombudsman Andre Marin's report clearly showed the OLG's lax security measures and the demand for protection for lottery players.

In response, the OLG in the meantime took some measures to that effect. Yet the latest forensic report shows how much more yet to be done to make the lottery system further fraudulent-proof.

What is the OLG?

The Ontario Lottery and Gaming Corporation is a provincial government agancy operating and managing province-wide lotteries, casinos and slots facilities at horse racing tracks.

For over 30 years, the OLG has generated more than $23 billion dollars to support Ontario's healthcare, physical fitness, sport, recreation and cultural activities. It also supports the Ontario Trillium Foundation, a provincial government agency, "to help build healthy and vibrant communities across Ontario by increasing the capacity of the voluntary sector through investments in community based initiatives."

Anyone 18 years and older can participate in the lotteries.

Some Observations

  • Lotteries, casinos and horse race slots facilities are legalized gambling.
  • The lottery system is a kind of unjust, in the sense that, everybody by purchasing tickets is contributing to make one or only few persons millionaires. It is all the more unjust because it is government managed. The government is supposed to benefit as many persons as possible. Is it happening through the lotteries? Most of the lottery players are from the poor and middle class families.
  • There is no doubt that the government has been doing a lot of good works with the funds raised through lotteries. At the same time, there are numerous compulsive lottery players who are overspending themselves and bringing a lot of misery and frustration in their lives.
  • Very few people are ready for or capable of managing an extremely large amount of money (in millions) received in a free fall.
  • Several years ago, there was a survey of the big winners of lotteries. In the survey, most of the winners mentioned that they were not happy after the winnings. Some said that their families broke down fighting over the money, a few said that they overspent their winnings in a few years and were living in poorer houses than before receiving the lotteries, and others said that they could not go out and face people as they were accosted by people requesting money from them.
  • From the media reports we come to know that a good number of lottery retailers went to the OLG and claimed prizes again and again and in large amounts. How could this happen if there wasn't some kind of collusion between them and some of the OLG employees?
  • There has been few cases where customers hand-marked one-dollar box of Lottario sheets at different times without marking the Encore, but when these sheets were fed in the lottery machine, two-dollar tickets came out. The markings were clear and there were no smears, no splotches. The lottery machine scanner was clean, there were no specks of dirt. The quirkiness of the machine could not be understood.
Some Proposals

  • Let the OLG give prizes, including big prizes, as it is. Each time save some money from there to create a big prize fund that will be compulsorily awarded once a month to as many people as possible. For example, if the fund is of $1,000,000, let it be given to many people in small amounts (let's say: $10,000; $20,000; $30,000; and $40,000). Winners from poor and middle class background would benefit the most this way. They would be able to pay off their small debts and get some relief in their life.
  • A thorough study needs to be done on the total impact -- both good and bad -- of the lottery and gaming system on the Ontario society. Proper steps are also required to identify and help compulsive and self-destructive gamblers.
  • If the OLG comes to know of any other quikiness of lottery machines, they should do a thorough checking of these machines.
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