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Probe launched into WCLC security |
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Written by Dave Mabell Lethbridge Herald
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Tuesday, February 10 2009, 2:57 PM |
Reports of too many “insiders” winning government-sponsored lotteries have spurred investigations across Canada. Now a report shows Alberta lottery retailers are not only “luckier” than their customers, but they’re also the slowest in Western Canada to adopt new security procedures.
Lottery officials in Alberta, however, say the number of insiders — retailers, employees or family members — who claim lottery winnings in this province is not causing alarm. Solicitor General Fred Lindsay, the minister responsible for the province’s casinos and lotteries, was not available Tuesday to respond to reports that lottery retailers in Ontario may be banned from buying the tickets.
But an official at the province’s liquor and gambling regulator indicated Alberta officials were not planning similar restrictions here. And there are no immediate plans for “smart card” protection that’s been proposed for other lottery networks, she said.
Meanwhile in Manitoba, another province that partners with Alberta in the Western Canada lottery, a cabinet minister has confirmed an investigation has been launched into the Western’s security procedures. Faced with many of the same issues, Ontario and British Columbia have completed similar probes in recent years.
Andrew Swan, the minister responsible for lotteries in Manitoba, announced a review there after a study paid for by the Western Canada Lottery Corp. was discredited as inaccurate. Swan said consultants Deloitte & Touche will provide further analysis of the Western’s security challenges.
Confirmation of the latest review came this week after a CBC News investigation concluded Western retailers were winning a disproportionate number of jackpots, contrary to previous analysis.
The statistician used in the investigation, mathematics professor Jeffrey Rosenthal at the University of Toronto, slammed the 2007 study by the Ernst & Young group as misinterpreting reports of how many retailers played the games, and relying on old estimates of how many retailers and lottery machines were involved.
Retailers are winning far more often than the laws of probability allow, he warned — nearly twice as often as the general public.
“The numbers show pretty clearly that retailers are winning significantly more than you’d expect could happen by pure luck alone,” Rosenthal said. “So there is something happening here . . . There is something going on that should be investigated.”
That’s what happened in two of Canada’s largest provinces, where reports of insiders winning repeatedly triggered investigations which yielded scathing reports from the ombudsmen in Ontario and B.C. The president and CEO of the B.C. Lottery Corporation was fired in 2007 after the ombudsman’s investigators there found the B.C. lottery system was open to abuse and fraud — and lottery officials had failed to protect the public.
One retailer there had “won” 13 times in five years, and pocketed more than $300,000. Another “won” 11 prizes worth more than $3,000 each — all in the same year.
In Ontario, where the ombudsman’s investigators found retailers there falsified information on about $15 million worth of winning tickets, the lottery corporation’s chief executive officer was also dismissed in 2007. Now Ombudsman Andre Marin says little has changed — and all Ontario retailers should be banned from purchasing if they don’t clean up their act.
“If retailers and insiders can’t control their itchy fingers that demonstrate they’re not responsible lottery players, then it’s not worth the tens of millions of dollars to police them,” he said last week. “We should just ban them outright.”
That verdict came after a new forensic audit of the Ontario system found retailers and insiders claimed nearly $200 million over the last 13 years.
The Winnipeg-based Western lottery has not released figures showing how much it’s paid to insiders. But over a 16-month period ending last Sept. 30, it reports more than double the predicted number of insiders across the Prairies claimed prizes of $10,000 or more — 30 vs. a statistical probability of 14 — and the number in the $1,000 to $10,000 group was nearly double the predicted 162 winners across the West.
In Alberta, the Western officials say, there were 14 “insider” wins involving $10,000 or more over that period — 40 per cent more than expected — and 20 more winners (133 of them) than predicted in the $1,000 to $10,000 group.
At the same time, a “secret shopper” program run in each of the Prairie provinces showed Alberta lottery retailers were the least likely to follow the lottery corporation’s security guidelines. Officials urge them to ask for the customer’s signature before validating a ticket, to return the ticket once it’s been checked, and to offer a validation slip.
In Manitoba, lottery officials report retailers failed to check for a signature 38 per cent of the time, failed to return the ticket 39 per cent of the time and didn’t provide a validation slip 27 per cent of the time. In Saskatchewan the compliance was a little poorer, with 46 per cent not asking for a signature while 25 per cent didn’t issue a validation slip. (No figure was reported for non-return of the tickets.)
But in Alberta, Western Canada Lottery reports show 58 per cent of the retailers failed to ask for the signature, 64 per cent failed to hand back the ticket and 53 per cent did not provide a validation slip.
Shown those figures, the Ontario ombudsman called for an independent review of the Western Canada Lottery Corp., much like Ontario’s sweeping investigation.
“Those numbers are outrageous,” Marin said. “There has to be in the system a well-known principled position, that there is zero tolerance for fraud and the organization will take steps to send that message.”
If not, “it means you are prepared to look the other way.
“And if you are prepared to look the other way, then you are letting fraud happen and letting the public be ripped off.”
In Edmonton, a lottery spokesperson said no penalties were levied against Alberta retailers who failed to comply with the lottery corporation’s new security rules. But Lynn Hutchings-Mah, speaking for the Alberta Gaming and Liquor Commission, said nearly every one of about 2,400 lottery outlets across the province was visited by a “shopper” at least once last year.
Equipment has also been installed at all outlets, she added, allowing customers to check for a winning ticket without handing it to a clerk. Winners hear sound effects as well as immediately seeing how much they’ve won.
But while some jurisdictions (including British Columbia) have investigated the introduction of “smart cards” that would allow purchasers to link their name to each ticket purchased, Hutchings-Mah was unaware of any similar plans to protect Alberta players.
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Last Updated ( Monday, August 10 2009, 2:28 PM )
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