Controversial lotto

The British Columbia Lottery Corporation has nabbed at least eight lottery ticket retailers ripping off customers over the last two years, albeit for relatively small amounts, reports The Vancouver Sun this week. In one case, an employee pre-scratched more than 100 scratch-and-win tickets before putting them up for sale, but was caught and fired.

Quoting internal BCLC documents obtained under the Freedom of Information Act, the Sun revealed that concerns over lottery fraud in the Canadian province were first raised in late 2006, leading the lottery company to introduce new measures that included having its security staff review every retailer win over Cdn$1 000 in value.

All eight confirmed fraud cases since 2007 involved prizes lower than Cdn$1 000, suggesting dishonest retailers may be stealing smaller prizes because they know they aren’t as closely scrutinised.

In the scratch-and-win case, a customer complained to the lottery corporation that a number of “Gold Rush” tickets at a ticket retailer convenience store appeared to have tiny scratches in the instant-win box.

BCLC sent an investigator to the store the next morning, who found 85 scratchcards with minute scratch marks on them. When the store manager arrived, he said he had also discovered a number of tampered tickets and handed another 28 over to the investigator. The culprit tuirned out to be a night shift employee, who 'fessed up to the fraud and was fired. BCLC additionally suspended the store’s right to sell lottery tickets for one week.

Other cases involved the theft of winning keno tickets worth a total of Cdn$ 819, and shortchanging ticket holders. In one case, a retailer paid out a customer Cdn$ 51 when the prize was actually Cdn$ 91. In another, the customer received just Cdn$ 12 when the amount should have been Cdn$ 25.

And in one of the stranger fraud cases, the retailer didn’t steal a customer’s winning ticket, but instead used the customer’s credit card to buy one of his own!

BCLC spokeswoman Susan Dolinski told the Vancouver Sun that while BCLC doesn’t review retailer wins under $1 000, it has systems in place to detect smaller-scale fraud, such as a “mystery shopper” program and software that detects unusual ticket-validation patterns.

“We acknowledge that we can’t completely eliminate risk, like any retail business,” said Dolinski. “But we’re continuing to put layers of security in place to mitigate risk in the system.”

Across the country in Ontario province, the Ontario Lottery and Gaming Corporation acknowledged an embarrassing screw-up which saw it buying 22 European-manufactured and imported luxury cars as prizes, instead of supporting local manufacturing in tough times.

The Toronto Globe and Mail reported on widespread public and government criticism of the OLGC's "License to Win" prize selection, and the organisation's chief executive Kelly McDougald received a rocket from Deputy Premier George Smitherman, who decried the choice as a “huge lapse in judgment."

“OLG regrets making the decision to feature cars in a customer promotion that were not built in Ontario,” the Crown agency said Tuesday in a tersely worded statement. “Supporting Ontario business is an important part of OLG's mandate and this promotion should not have included foreign-made vehicles.”

Rui Brum, an OLG spokesman, said the annual promotion has in the past featured cars made by the Detroit Three as well as Volkswagen. The decision to go with Mercedes-Benz for this year's contest was made 10 months ago, he said, well before the global economic crisis led to a steep drop in domestic auto sales.

Senior management of the lottery corporation will review all aspects of the promotion, Brum said in an interview. “We're taking a look at everything.”

Nevertheless, what can you do with 22 luxury sedans? The OLGC is going ahead with the grand prize draw set for April 14, even though the corporation removed the information from its website Tuesday afternoon. It will give away 22 Mercedes-Benz B200 cars, worth Cdn$ 34 400 each, as part of the contest.

Deputy Premier Smitherman said he met Tuesday with lottery executives to tell them that he won't tolerate having a government agency's procurement practices favour foreign-made goods over those produced in Ontario.

“It was a crappy decision and I let them know it in full force,” Smitherman told reporters. “It's wrong on all levels and it was a big mistake.”

The decision is particularly troubling, he said, because the corporation has brought in a new slate of executives, including Ms. McDougald, to turn around its corporate culture after a scandal over the unusually high number of retailers who won lottery prizes. And the fact that the corporation got a good deal on the Mercedes-Benz vehicles matters little.

“Anyone looking to buy 22 cars today is going to get a pretty good deal on them, aren't they?” he said.

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