Ontario Lottery Not Playing Fair with Taxpayer Money

September 8, 2009

Fans of state-run lotteries often argue that the only reasonable way to allow legal lotteries is to have them run by the state. They claim that privately run lotteries would be crime ridden, while government-run lotteries are honest and above board. As we have noted, U.S. state-run lotteries have fallen a bit short of this standard.

Surely, however, the Canadians know how to run a crime-free government lottery?

From Casino Journal:

The board of the Ontario Lottery and Gaming Corporation resigned en masse Monday as lavish expense claims by senior executives at the troubled agency surfaced.

A report in the National Post said that over the last two years senior staff at the government-owned corporation billed taxpayers for, among other things: expensive bottles of wine, a Weight Watchers membership, babysitters, luggage replacement, credit card fees, and a cloth grocery bag, according to documents released by the province.

. . .

“We are taking action today to ensure the protection of taxpayer’s money and increase the accountability of the organization,” [Finance Minister] Duncan said at a Toronto news conference.

The corporation has been rocked by a series of embarrassing promotions, scandals and allegations of fraud over the past several years.

They included the case of Bob Edmonds, an Ontario man who was cheated out of a $250,000 lottery prize by a convenience store clerk who kept the prize for herself. The OLG failed to act on Edmonds’s complaint and he finally sued. That case prompted an investigation by Ontario’s ombudsman, who found OLG regularly turned a blind eye to fraudulent behavior by its retailers. Between 1999 and 2007, the ombudsman found 247 major lottery wins ranging between $50,000 and $12.5 million by lottery retailers, their employees and their families and OLG employees.

Earlier this year, OLG released an audit showing it has paid out more than $198 million to insiders since 1995, roughly twice the amount the provincial ombudsman initially suspected.

More on state-run lotteries here.


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