Saturday, March 24, 2007

Swinging the lotto ax at the wrong target

The head of the Ontario Lottery and Gaming Corporation, Duncan Brown, has been fired by the province's Minister of Public Infrastructure, David Caplan. This in spite of the fact Brown was starting to clean up the fraud mess within the OLG and was fully ready to implement all the recommendations of the Ombudsman.

Perhaps a new perspective is needed at the agency that operates Ontario's games, casinos and racetracks. However, I think Caplan has this all wrong. The problem isn't with the lottery or the people at the offices in Toronto and Sault Sainte Marie who in good faith operate the games. Even though the entire current series of Super Bingo had to be pulled last week when someone discovered one could pick winners from the scratch and lose tickets without even scratching.

No, the problem is with the group of people who best know how the game is played -- the retailers who sell the tickets. The "win" rate among those operators is way higher than the general population or what one would expect it to be. This is patently unfair to those who buy scrips in the hopes he or she will have as fair a chance as anyone else.

The only truly fair way to do this would be to prohibit retailers and their employees from purchasing tickets. This might wind up excluding a large number of people -- in Ontario it could be as many as a half million -- but it could be addressed if in return the store operators got larger commissions on sales and for big wins. This is the law in many US states, but it would never fly in Canada; that is retailers would never accept a ban outright. After all, most retailers do play by the rules and it's a relative few bad apples that are the spoilers.

So instead there should be a "one strike rule": If a retailer gets caught cheating, he or she is not only banned from selling lottery products (which in many cases would put him or her out of business anyway) but they have to pay back any and all ill gotten gains with an additional penalty, say 50 to 100%, to go to the Criminal Injuries Compensation Board. This is in addition to jail time. We don't have to put up with unscrupulous ticket sellers, period.

In the meantime, some of the measures that OLG has already put in -- for example, a machine not only plays a special chime if it validates a "win" of over $10,000 but also locks down the terminal until the win can be verified by voice through both the retailer and the customer -- are things that should have been done long ago but are still welcome steps. That being said, Brown should be let to finish the job of weeding out the fraud, before he is let go. Caplan overreacted.

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