TORONTO - After a year of scandal and charges that provincial lottery corporations across Canada turned a blind eye to a disproportionate number of prizes claimed by lottery retailers, hopeful millionaires will be playing by a different set of rules in the new year.
In 2008, provincial lottery corporations across Canada will be making it more difficult for fraudsters to cheat the system, all part of an effort to shore up rattled consumer confidence and convince people it's possible to "live the dream" without selling lottery tickets for a living.
Starting New Year's Day, Ontario will join other retailers across Canada by making it mandatory for players to sign their lottery tickets before cashing them in. Players will also be better able to check their own tickets, and many retailers will have screens facing the customer telling them whether they have a winning ticket.
Retailers across the country have had to undergo background checks and have to navigate a whole new set of rules if they want to play the lottery.
Some in British Columbia are no longer allowed to purchase a ticket from their place of business, while others in Ontario will have any wins over $10,000 investigated by the Alcohol and Gaming Commission - the new regulator of Ontario's lottery corporation starting Jan. 1.
Most of the changes are the result of Ontario ombudsman Andre Marin and his scathing investigation of the province's lottery corporation.
"We blew the lid off a problem which is worldwide," Marin said in an interview. "It's not just Ontario. It's not just Canada. It caused the whole world to look into their own systems."
The system Marin found in Ontario was "a complete mess." The lottery corporation behaved like "an obstinate child," ignoring complaints they received about retailers who scammed customers out of winning tickets, he said.
The corporation was more concerned with "coddling" retailers, who are responsible for marketing, selling and buying many of their products, than it was with addressing legitimate concerns from the public, Marin added.
Marin said lottery officials who raised concerns about suspect claims by retailers in 2003 and 2004 -- including one $12.5 million prize -- were told by the former CEO: "Sometimes you hold your nose."
"Their attitude was, 'You buy a lottery ticket, you're on your own,"' Marin said. "It was pretty ugly."
Since his report was issued, Marin said the corporation has been co-operative and tried to show it takes retailer fraud seriously by accepting his recommendations.
More importantly, Marin said, they've accepted their responsibility. "It's not just the public's problem if they're getting screwed over."
The Ontario Lottery and Gaming Corp. has implemented about 80 per cent of Marin's recommendations, a spokeswoman said. The corporation's new CEO, Kelly McDougald, was unavailable to discuss the changes.
While some critics say it's hard to believe all the holes have been plugged, the moves have satisfied the lottery's political masters.
"Ontarians should understand that while the odds may be long, when it comes to buying a ticket, they're entitled to play by rules that are fair," said Premier Dalton McGuinty.
"I'm asking them to review on an ongoing basis what is happening . . . (if) there are more things that we might do to inspire confidence in the buying public, then we should take those steps."
The dust hasn't settled yet on external lottery reviews in British Columbia and the Maritimes, both of which were prompted by the Ontario findings.
An audit in Nova Scotia found retailers pocketed 85 winning tickets - each worth more than $25,000 -- for a total of $14 million. The Nova Scotia government is demanding a review of Atlantic Lottery Corp. CEO Michelle Carinci after she was unable to explain to a legislative committee why lottery insiders won approximately 10 times more major prizes than expected.
Some critics say they wouldn't be surprised if Nova Scotia pulls out of the lottery corporation entirely in the coming year.
Michael Randall, vice-president at the lottery corporation, said the ALC "attacked the problem" in a span of six months. Retailers are now required to return all non-winning tickets to the customer and the corporation is expanding the number of self-checking kiosks to every retail site in the Maritimes.
"We've changed the way people buy tickets and validate tickets," Randall said. "We've really changed that experience to provide more protection and to provide the tools, if all used, will eliminate the fear of potential fraud."
British Columbia is still absorbing the impact of ombudsman Kim Carter's five-month investigation into the lottery system, which found the public was in danger of being ripped off by retailers and their employees who sold tickets.
One insider won 11 times in five years, collecting a total of $300,000, while another won $10,000 a year for four years. The lottery corporation kept few tabs on retailers, Carter said earlier this year while making 27 recommendations for change.
Although she said some of the changes she recommended will take time to come into effect, Carter wants the province to find a better way of tracking insider wins. Retailers and their employees should have to swipe a personal card when purchasing a ticket which would remove any doubt if a retailer does win a prize, she said.
"There (are) no aspersions cast on them because they'll be able to demonstrate they bought that ticket," Carter said.
Too late, said Dave Bryans, head of the Canadian Convenience Stores Association. A Manitoba clerk claimed a lottery prize recently and became a target of radio talk shows, he said.
The questions surrounding provincial lotteries has tainted the reputation of retailers, especially in Ontario, he said.
"The next time, somewhere in Ontario, a retailer gets lucky enough to win a million-dollar jackpot, is he now going to be painted again?" said Bryans. "We have a lot of rules in place, all because of a couple of bad retailers. In any business, you are going to have bad people . . . We're going to have to build confidence to get over that."
Retailers have been completely co-operative with all the changes, including submitting to background checks and following a whole set of new rules, Bryans said. But they aren't prepared to stop buying tickets, he added.
"As retailers, we still want to live the Canadian dream and win a lottery," said Bryans, adding public confidence hasn't been shaken that much by the scandals.
"They're still lining up to buy lottery tickets every day - the bigger the pot, the bigger the lineup. It's an old story that someone keeps trying to rehash and I think it's time to move forward."
