$100 Million Canadian Lotto Row Goes On

Published: Tuesday, March 27, 2007 Online-Casinos.com

$100 MILLION CANADIAN LOTTO ROW RUMBLES ON

Ombudsman's report on retail selling of tickets described as "blistering"

The Canadian Press is closely following several provincial scandals in the Canadian lotto industry, describing as "blistering" a report on lottery fraud in Ontario which observers claim is further proof that the fox is guarding the gambling henhouse.

Gambling Watch Network Ontario, a group of concerned citizens, says the federal government in Ottawa should lead a long overdue inquiry into how provinces both police and profit from Canada's multibillion-dollar betting industry.

"The honeymoon's over," said Brian Yealland, spokesman for the watchdog group. "You've got a situation where the regulator, the operator, the profit-maker and the policing agency are all appointed by each other. The system is just as corruptible if [provincial] governments run it as if the mob ran it. It's just not working."

The sheer scale of conflicting interests helps explain the report Monday that lottery-ticket sellers have fraudulently collected at least $100 million in the province since 1999, Yealland says.

Ontario ombudsman Andre Marin (see previous Online-Casinos.com/InfoPowa reports) found that the Ontario Lottery and Gaming Corp. ignored allegations of crime for years. He blamed the provincial body's fixation "on profit rather than public service."

Indeed, the betting business has never been better, the news agency reports.

Statistics Canada has tracked a steep upward arc of gambling cash as lotteries, video lottery terminals and casinos spread across the country. Net revenue from such government-run operations soared to $12.9 billion in 2005, up from $2.7 billion in 1992.

Federal Justice Minister Rob Nicholson was 'not immediately available' to comment on whether Ottawa should play some kind of oversight role.

Hal Pruden, a spokesman for the federal Justice Department, said the running of so-called "lottery schemes" - including casinos - has been exclusive provincial turf since 1985. The federal government in Ottawa withdrew its own right to conduct such ventures in exchange for $100 million from the provinces to help pay for the 1988 Winter Olympics in Calgary.

Today, Ottawa's role in gambling is limited, Pruden said.

"Parliament sets the parameters of legal gambling," he said in an interview with Canadian Press. "If the police investigate and find that's not being done, it's the attorney general of the province who would be prosecuting any crime."

Yealland points out that government bodies may turn a blind eye to such activity - as the Ontario ombudsman found - because they're dependent on gambling cash cows.

"They have a huge vested interest in keeping the public content and not asking too many questions. They want to protect their own profits."

Pruden declined to comment when asked whether Ottawa has any duty to intervene when such conflicts arise. "People can read your story and draw their own conclusions as to whether they think there should or shouldn't be more done in the province or more done federally."

Jim Ridler, a Queen's University business ethics professor, suggested Ottawa could play a role should similar problems with lottery retailers be confirmed in other provinces. There have been reports of statistically improbable wins by sellers in New Brunswick and British Columbia.

Calling it a classic case of conflict of interest, Ridler suggested the federal government might enact a law banning retailers from playing lotteries.

"It just seems to me ... that that's wrong," he said. "Perhaps there is a role the federal government could play that would establish a guideline across the provinces in that particularly important regard."