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| ELECTORNIC EDITION |
| 2007-11-09 |
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GLOBAL CHINESE PRESS |
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Audit rips lottery security System failed to ID 21 winners as retailers
Chad Skelton 2007-11-09 15:57 CanWest News Service | The way the B.C. Lottery Corp. keeps track of retailers who win big prizes is so flawed that it failed to properly identify 21 major prizes won by retailers over the past six years -- including one retailer who took home $675,000, according to an independent audit released Thursday.
The audit, ordered by Solicitor-General John Les last spring, also recommends the government consider having BCLC and the Gaming Policy and Enforcement Branch, which regulates gambling in the province, report to separate ministries. Both report to Les.
"With the existing structure ... there is a potential for an actual or perceived conflict of interest," states the audit, conducted by the firm Deloitte & Touche.
Les ordered the audit in May after B.C. ombudsman Kim Carter released a scathing report that found BCLC hadn't done enough to prevent retailer fraud.
Carter's report uncovered flaws in virtually every aspect of BCLC's security systems and had identified 21 other cases involving retailers who each won several lottery prizes.
Les said in an interview Thursday that government will move on 27 of the Deloitte report's recommendations immediately. Twelve, including one for a fraud detection system, will take more time to complete, two more will require regulatory or legislative changes and three "require further consideration and review by government.''
Les admitted he was surprised at the discovery of more major retailer wins.
"I think it's also clear that there's no evidence per se that anything untoward happened in those cases,'' he said. "But you know I'm not naive about it -- the fact of the matter is that once the ticket is gone, the evidence is gone, too.''
Les said it is likely impossible to determine now whether fraud by retailers has occurred in any of those cases. He said the challenge that BCLC and his ministry is addressing now is to reduce the chances of any retailer fraud happening in the future.
"We're going to do everything possible,'' he said. "The bottom line is we want to have a retail lottery system that's fair, where the public can purchase tickets and be assured they're not going to be defrauded of their appropriate winnings.''
Carter launched her investigation last December after The Vancouver Sun reported retailers in the province were winning major prizes at several times the rate of the general public.
Those figures, obtained through a Freedom of Information request, raised fears that retailers might be stealing customers' winning tickets -- by, for example, falsely telling a customer his or her ticket was a loser.
In BCLC's original response to The Sun's FOI request, it stated that, between 2000 and 2006, 177 prizes over $10,000 had been awarded to retailers -- or 4.4 per cent of all prizes.
To test the accuracy of those figures, Deloitte conducted a series of tests comparing the names and addresses on lottery-prize cheques to those of known retailers.
What they found was that, in its response to The Sun and the ombudsman, BCLC missed 21 separate retailer wins -- including five multiple winners and a single prize of $675,000.
In eight of those cases, the prize winners failed to properly identify themselves as retailers in their interviews with BCLC security staff.
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