Ontario Lottery and Gaming Corporation

Ontario Lottery
and Gaming
Corporation
PhaseIIReport–LotteryReview
November23,2006
Disclaimer
ThisdocumenthasbeenpreparedandisintendedsolelyforOntarioLotteryandGaming
Corporation’suseandmaynotbeedited,distributed,published,madeavailableorrelied
uponbyanyotherpersonwithoutKPMG’sexpresswrittenpermission.
©2006KPMGLLP,theCanadianmemberfirmofKPMGInternational,aSwisscooperative.Allrightsreserved.
TableofContents–PhaseII
Summary
5
Background.................................................................. 5
Scope and Work Plan................................................... 5
Work Completed .......................................................... 6
Key Observations......................................................... 8
Recommendations for Enhancing Current
Processes ..................................................................... 9
Lottery Controls
12
Specific Controls for Purchasing and
Authenticating Tickets .............................................. 12
Key Controls .............................................................. 12
Recommendation Six................................................. 12
Retailers
Role of Retailers in Lottery Activities ....................... 14
Retailer Management................................................. 14
Recommendation Seven ............................................ 15
Increase Compliance Reviews at Retailers................ 15
Recommendation Eight ............................................. 15
Disclaimer
ThisdocumenthasbeenpreparedandisintendedsolelyforOntarioLotteryandGaming
Corporation’suseandmaynotbeedited,distributed,published,madeavailableorrelied
uponbyanyotherpersonwithoutKPMG’sexpresswrittenpermission.
©2006KPMGLLP,theCanadianmemberfirmofKPMGInternational,aSwisscooperative.Allrightsreserved.
14
Termination of Retailers ............................................ 16
Recommendation Nine .............................................. 16
Insiders
17
Insiders ...................................................................... 17
Recommendation Ten ................................................ 17
Prize Office
18
Prize Office Manual ................................................... 18
Recommendation Eleven ........................................... 18
Retailer Paid Prize Policy .......................................... 18
Recommendation Twelve .......................................... 18
Interview Process ...................................................... 19
Recommendation Thirteen ........................................ 19
Handling of Tickets ................................................... 20
Recommendation Fourteen ....................................... 20
Clarification of Escalation ......................................... 21
Recommendation Fifteen........................................... 21
Access to Tracking of Incidents or Alleged
Incidents involving Retailers ..................................... 21
Recommendation Sixteen.......................................... 22
Counter Ticket Redemptions..................................... 22
Recommendation Seventeen ..................................... 22
Call Centre
23
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 3
Current Call Centre Technology ................................ 23
Recommendation Eighteen........................................ 23
Call Routing ............................................................... 24
Recommendation Nineteen ....................................... 24
Investigative and Internal Audit Practices
25
Investigative Process................................................. 25
Recommendation Twenty .......................................... 27
Recommendation Twenty-one ................................... 27
Other Observations from Documentation Review .... 27
Recommendation Twenty-two................................... 27
Practices From Other Jurisdictions
28
Recommendation Twenty-three ................................ 30
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 4
Summary
Background
KPMGLLP(KPMG)wasengagedbytheOntarioLotteryandGamingCorporation
(OLG)toreviewcertainpoliciesandproceduresrelatingtoitslotteryoperations
andspecificallythosepertainingto“insider”activities(asdefinedbyOLG)
includingthesale,purchaseandredemptionoflotterytickets.Ourworkwas
conductedintwophasesasoutlinedinthescopeandworkplansectionbelow.
Wepreviouslyreportedspecifickeyobservationsandrecommendationsinour
PhaseIreportsummary,datedNovember3,2006.Forconvenience,thekey
PhaseIobservationsandrecommendationshavebeenincludedinthisreport
summary.
ThecompletionofourPhaseIIworkstepshasnotresultedinanychangesto
ourPhaseIrecommendations.ThefindingsfromourPhaseIIworkhave
providedadditionalrecommendationsforconsiderationbyOLG.
Thisreportisprimarilyintendedtooutlinetheobservationsand
recommendationsresultingfromthePhaseIIworkperformedduringtheperiod
fromOctober29,2006toNovember23,2006.
Scope and Work Plan
Inaccordancewithourengagementletter,datedOctober29,2006,ourwork
stepsweretoincludethefollowing:
PhaseI:
•
ReviewingthedirectionreceivedbyOLGfromtheMinisterof
PublicInfrastructureRenewal.
•
ReviewingOLGpoliciesandproceduresandinterviewingOLG
representativesonmattersrelatingto“insiders”includingthe
“insiderwin”proceduresandprocessesrelatingtotheContact
CentreandthePrizeOffice.
•
ReadingarecentReportonControlsintheLotteryGamingand
LotteryGamingSupportSystems,datedOctober6,2006,
preparedbyErnst&Young,anindependentaccountingand
auditingfirm.
•
Carryingoutahigh-levelreviewofcertaininformation
technologycontrolsandprocessessurroundingthesaleof
lotteryticketsandthesecurityoflotteryterminals.
•
Observingtheprocessingofcertainlotterytransactionsat
variousretaillocationsinToronto.
•
PreparingaPhaseIreportsettingoutourobservationsand
recommendationsbasedontheworkcompletedasat
November3,2006.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 5
•
PhaseII:
•
CarryingoutselectivetestingofadherencetotherelevantOLG
policiesandprocedurestoascertainthattheyareoperatingas
described.
•
Reviewingavailablebenchmarkingreportsandanalyses,as
wellas,practicesinotherjurisdictions,asavailableandastime
permits.
•
Readingthird-partyreportsprovidedbyOLGrelatingtothe
statisticanalysisof“insider”winsover$50,000.
•
Preparingareportsettingoutourremainingobservationsand
recommendations.
Inperformingourworksteps,wereviewedOLGproceduremanualsand
documents,observedprocesses,conductedinterviews,examineddocuments
evidencingperformanceofcertainactivities,and,gatheredandanalyzeddata
obtainedfromOLGemployees,publiclyavailablesourcesandothersources.In
conductingourwork,wereliedontheinformationprovidedbytheindividuals
interviewedandresultsoftheselectivetestingofrelevantOLGprocedures;
accordingly,wedonotexpressanopinionastotheaccuracyorcompletenessof
theinformationobtainedandeffectivenessofthecontrolsinplacewithrespect
to“insider”activities.
Status of Our Work
Wehavecompletedbothphasesofourworkplan,assetoutabove.Weare
issuingthisreportdatedNovember23,2006.Thefollowingsummarizesthe
workwehaveconductedfromOctober29,2006toNovember23,2006.
Work Completed
Phase I
•
ReviewedthedirectionreceivedbyOLGfromtheMinisterofPublic
InfrastructureRenewal
•
ReviewedcertainavailableOLGpoliciesandproceduresrelatingto
“insiders”includingthe“insiderwin”proceduresandprocesses
relatingtotheContactCentreandthePrizeOffice.Thisworkstepwas
completedinPhaseII
•
Performedthefollowingproceduresinconnectionwiththerelevant
OLGpoliciesandprocedures:
•
Interviewedcertaininternalauditstaffrelatingtocertainlottery
operationsandrelatedprocedures
•
InterviewedcertainOLGemployeesattheLotteryTestLabin
NorthYorkconcerningtheoperationofRetailTerminalsand
observedelementsoftheoperationofaterminal
•
InterviewedOLGemployeesattheYonge/DundasPrizeCentre
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 6
•
Observedtwomajorwininterviewsandallrelatedprocedures
conductedforthesewinsattheYonge/DundasPrizeCentre
•
Observedcertainpayoutsforotheramounts(i.e.,between$990
and$50,000)attheYonge/DundasPrizeCentre
•
Observedtheoperatingpracticesofseverallotteryretailers(the
retailerswereunawareoftheobservation)
•
InterviewedcertainOLGseniormanagementrepresentatives
•
Reviewedthedocumentsincludedin41“insider”majorwinfiles
madeavailabletous,(preparedbyTorontoPrizeCentre)
•
InterviewedOLGemployeesconcerningthepoliciesand
proceduresoftheContactCentreandobservedcertainoperating
practicesoftheContactCentreinSaultSteMarie,and
•
Observedamajor“insider”wintelephonecallwhileintheContact
Centre
•
ReadarecentReportonControlsintheLotteryGamingandLottery
GamingSupportSystems,datedOctober6,2006,preparedbyErnst&
Young,anindependentaccountingandauditingfirm
•
Carried-outahigh-levelreviewofcertaininformationtechnology
controlsandprocessessurroundingthesaleoflotteryticketsandthe
securityoflotteryterminals,and
•
Reviewedpolicyandproceduresdocumentationandfileslocatedin
Toronto,SaultSte.MarieandtheMississaugaDistributionCentre.
•
PreparedaPhaseIreportbasedonworkcompletedasatNovember3,
2006.
Phase II
•
CompletedthereviewofcertainavailableOLGpoliciesandprocedures
relatingto“insiders”includingthe“insiderwin”proceduresand
processesrelatingtotheContactCentreandthePrizeOffice.
•
Conductedadditionalfollow-upinterviewswithOLGemployeesto
completeourwork
•
Reviewed220“insider”majorwinfilestoassesscompliancewithOLG
procedures
•
Reviewed38investigativefiles(preparedbyCorporateSecurityand
Surveillance)
•
ReviewedanOLG-preparedsummaryofpracticesinotherNorth
Americanjurisdictionsandtherelatedsupportingcorrespondence,and
•
Identifiedpracticesfromotherjurisdictionsthatmaymitigaterisk
associatedwith“insider”wins.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 7
•
Preparedthisreportsettingoutourremainingobservationsand
recommendationsbasedonfieldworkconductedbetweenOctober29,
2006andNovember9,2006.
Key Observations
Below,weprovidethekeyobservationsbyphaseofourengagement.
Additionalobservationsareincludedintheremainingsectionsofthisreportand
inourPhaseIreport.
Phase I
Keyobservationsbasedoninformationprovidedtousandworkconductedfrom
October29,2006toNovember3,2006include:
•
OLGlotteryticketshaveanumberofkeysecurityfeaturesbuiltinto
them
•
Retaillotteryterminalsoperatewithavarietyofkeysecurityfeatures
•
Generallypurchaseranonymityispreservedandprizesarepayableto
theticketbearer
•
Ticketbearersareinformedofcertainactivitiestoprotecttickets
•
Damagedandstolenticketscircumstancesaresubjecttocertain
securityproceduresandprotocols
•
Lotteryterminalsarenowsubjecttoa“freeze”processformajorwins
(winningticketsover$50,000)(this“freeze”processwasintroduced
duringFebruary2006)
•
Thoughoperatingproceduresrequirecallloggingforspecificcategories
ofcalls,callsintotheContactCentrearenotautomaticallylogged
•
“Insider”winsgreaterthan$50,000aresubjecttospecificprocedures
andchecksgenerallyconductedbythePrizeOfficeand/orInternalAudit
•
OLGdoesnothaveacomprehensivedatabaseofallindividualsthatare
“insiders”anditmaynotbepracticabletohaveacompletelistof
insiders
•
Notallretaillotteryterminalsarepositionedtoensurecustomersare
abletoseetheirticketatalltimes
•
OLGusessophisticatedtechnologysystemstoproduce,controland
validateticketssoldandtosecuretheirfacilities,and
•
OLGiscommittedtothecontinueddevelopmentandenhancementof
itstechnologiesandprocessestosupporttheintegrityofgamingin
Ontario.
Phase II
Keyobservationsbasedoninformationprovidedtousandworkconductedfrom
October29,2006toNovember23,2006include:
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 8
•
Overtheyears,OLGprocessesandtechnologieshavecontinuedto
improve
•
Policiesandprocedureswereconsistentlycarriedoutforpaymentsof
“insider”wins,retailermanagementandcallcentreoperations
•
Decisionstosupportpaymentsto“insiders”aredocumented
•
DocumentationforinvestigationsconductedbyCorporateSecurityand
Surveillanceweresignificantlyimprovedafter2003
•
Currentinvestigativeprocessesarenotformallydocumentedwithinthe
policyandproceduremanuals
•
Manyofthelotterypracticesfromotherjurisdictionsareincorporated
withintheproceduresofOLG,and
•
CallCentreoperationsaredocumentedandmonitored;butoptionsdo
existtofurtherenhancetheprocesswithimprovedtechnology.
Recommendations for Enhancing Current Processes
SimilartootherlotteryorganizationsthroughoutNorthAmericaandtherestof
theworld,themajorityofOLGlotteryticketsarepurchasedanonymously(with
theexceptionofsubscriptionsalesthroughLottoAdvance).Assuch,itisnot
possiblewithabsolutecertaintytolinklawfulownershiptoaspecificclaimant
presentingaticket.CurrentOLGproceduresfocusonobtainingcorroborative
evidencefromitsvarioussystemstolinktheclaimantwiththepurchaseofthe
ticket.
OLGhasdevelopedandcontinuestoenhanceitsgamingenvironmentforonlineandinstantgames.Itmustberecognizedthatthereareinherentlimitations
foranysetofinternalcontrolsindetectingfraud,errororotherillegalacts,
especiallywhenfraudiscommittedthroughcollusionandforgery.
Therearealwaysindividualswhoarewillingtogetinvolvedinillegalacts.The
continuedevolutionofnewprocessesandcontrolscanreducetheriskofsuch
actsoccurringorgoingundetected;butwillnoteliminateallundetectedacts.
Careandjudgementmustbetakentoensurethebenefitfromanincremental
controlexceedsthenetcostofsuchcontrol.
Giventheinherentlimitationscreatedbytheanonymityofapurchaser,thebest
protectionforconsumersisprovidedbyfocusingoncontrols,policiesand
proceduresthatprovideinformationdirectlytothepurchaserandlimitthe
transferabilityoftickets.Othercontrolsrecommendationsmaysupportan
improvedoperatingenvironmentatretailers.
WenotethattheOLGhasimplementedorplanstoimplementseveral
recommendationsoutlinedinthisreport.
Implementationofmanyoftherecommendationsoutlinedbelow,whiletaking
intoaccountOLG’scurrentpolicies,proceduresandcontrols,shouldbring
OLG’scontrolenvironmenttoatleastequaltoorabovethoseofotherleading
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 9
jurisdictions.OLGhasatrackrecordofenhancingitsproceduresandcontrolsas
newenhancementsareidentifiedinotherjurisdictions.
Phase I
AsaresultofPhaseI,wemadethefollowingfiverecommendations.Eachof
theserecommendationsareconsideredkey.ItisourunderstandingthatOLG
hasimplementedthefirstfourrecommendationsandiscurrentlyconsidering
theimplementationofthefifth.
Recommendation One
OLGshouldinitiateacomprehensiveeducationalcampaigntomakecustomers
awareofthetechniquestheyshouldemploytoprotectpurchasedtickets.In
particular,thecampaignshouldemphasizetheneedtocompleteandsignthe
backoftheticketatthetimeofpurchase.
Recommendation Two
OLGshouldestablishapolicythatretailerswillonlyvalidateticketsifthe
customerhascompletedandsignedthebackoftheticket.Ticketsshouldnot
bevalidatedandprocessedunlesssigned.OLGwillneedtoprovidetrainingto
retailersonthispolicyandwillneedtoconsideranappropriateapproachto
motivatingandenforcingcompliance.
Recommendation Three
OLGshouldconsideramorecomprehensiveroll-outofcustomer-accessible
ticketcheckerswithanappropriateawarenessprogram.
Recommendation Four
OLGshouldconsiderareviewofthe“insider”definitionandpolicywithaview
ofmakingthepolicymorepracticalandcontrollable.Aspartofchangestothe
“insider”policy,wewouldsuggestthatthethresholdof$50,000thatinitiates
morespecificproceduresandchecksbereduced.Considerationshouldbe
giventoreturningtothe1995levelof$10,000.
Recommendation Five
OLGshouldconsidertheimplementationofanautomaticcallloggingfacilityat
theContactCentre.Inconjunctionwithsuchanimplementation,appropriate
monitoringandfollow-upprocessesshouldbedevelopedandrolledoutaswell.
Phase II
Inthisreport,weprovideeighteenadditionalrecommendationsforthe
considerationofOLG.Belowweoutlineasummaryofthekey
recommendationsforOLG’sconsideration.
•
OLGshouldconsiderthecontinuedenhancementofprocessesand
operatingenvironmentatretailers.Considerationsshouldincludenewaudio
alertsandmessagesonthescreentothepublic.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 10
•
OLGshouldconsideraddingadditionaltermsandconditionsexplicitlyinthe
RetailContract,gamerulesand/orOLGpoliciesthatminimizerisk.Matters
forconsiderationinclude:
•
Specificeventsoroccurrencesthatwilldefinitelyresultinaretailer
termination.Thisshouldbeinadditiontothecurrentopen-ended
clause(i.e.,retailerengagesinconductorpermitsaneventor
occurrencewhichtheOLGatitssolediscretionconsidersprejudicialto
theinterestandreputationofOLG)
•
Increasedclarityastorolesandresponsibilitiesofretailerswithrespect
torepresentationstoanddirectivesfromOLG,and
•
Definitionofspecificcircumstanceswhereapresentedticketbyan
“insider”wouldnotbeeligibleforpayment(i.e.,arethere
circumstanceswherebysomeonepresentingavalidticketwouldnotbe
paid).
•
OLGshouldreviewcurrentpracticesandpoliciesrelatingtoretailersand
considerdefiningmorespecificallythecircumstancesthatwouldcausea
retailerterminationandwhatcircumstanceswouldcauseanescalated
process.
•
OLGshouldcontinuetoenhancethemajorwininterviewprocessby:
•
Addingincreasedfocusforthedeterminationofwhethercohabitants
and/orrelativesofclaimantsaresubjecttothe“insider”rules
•
IncreasingtheinvolvementofCorporateSecurityandSurveillanceinthe
interviewprocess,and
•
Providingspecificguidanceforconditionsrequiringescalationforthe
majorwininterviewprocess.
•
Claritywithregardtoactionstobeundertakenwhentheclaimantcannot
provideticketpurchaseinformation.
•
OLGshouldconsideradoptingcertaintickethandlingprocedurestoprotect
evidencethatmaybeonthemajorwinticket.
•
OLGshouldformallydocumentitsinvestigativeprocesseswithinOLG’s
policyandproceduremanualanddevelopspecificdocumentationstandards
andguidelines.
•
OLGshouldconsiderdocumentingthespecificcircumstancesthatcould
resultin:aclaimant’sticketnotbeingpaid;or,thematterbeingreferredto
athird-partyforfurtherinvestigation,thepolicehavingjurisdictionorthe
Court.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 11
LotteryControls
Specific Controls for Purchasing and Authenticating Tickets
OLGhasveryspecificsystems,controlsandproceduresto:
•
Preventtheproductionofanewwinningticketafterthepurchase
deadlinebeforeaspecificdraworevent(e.g.,asportsevent),and
•
Authenticatewhetheraticketisavalidticket.
Key Controls
AsstatedinourPhaseIreportandconfirmedbyourfurtherworksteps
undertaken,toprotectwinningtickets,thefollowingshouldbedonebythe
lawfulticketholder:
•
Signandcompletethebackoftheticket,atthetimeofpurchase
•
Storeticketsinasafeplace
•
Considercheckingone’sownticketpriortovalidatingwithanyretailer
•
TakeadvantageofanOLGself-checkingdevice(whereavailable)
•
ObservetheticketbeingvalidatedthroughaRetailTerminal
•
Listenforthemusicfromthelotteryterminalindicatingawin,and
•
Lookatthecustomerdisplayscreenformessages.
AsaresultofourPhaseIIwork,wehavelearnedthatthefollowingadditional
stepscouldbeundertakenbyalawfulticketholdertofurtherprotecttheir
tickets:
•
Takeaphotocopyofthetickets(CurrentOLGprocessesand
proceduresaresuchthatifaphotocopyofaticketwereavailable,OLG
maybeabletoassistalawfulticketholder),and
•
AlwaysretrievetheirticketfromaRetaileratthetimeitischeckedfor
winningnumbersorpaidoutaprize.
Currentprocedureforpaid-outinstantwinningticketsisthattheretailertears
thebarcodeonthebottomofthetickettoindicatepaymentandtheretailer
retainstheticket.Thisprocessshouldbeconsideredforharmonizationwiththe
on-lineticketsprocessofreturningthetickettotheclaimant.
Other Considerations for Improving Controls
Throughourreviewofprocesses,thereareseveralrecommendationsthathave
cometoourattentiontoimprovethecontrolsinandaroundtheRetailTerminal.
Recommendation Six
Wherepractical,considerthefollowing:
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 12
•
Foron-linetickets,printingamessagedirectlyontheticket
indicatingthattheticketisnotawinningticketinsteadofareceipt
currentlyprintedonseparatepaper(thisisalreadydoneforprizes
paidthrougharetailer)
•
Forinstanttickets,exploreoptionsandredesigntheinstantticket
redemptionprocessesto:
•
Markticketsasbeingpaidornonwinningtickets(We
recognizethatthecurrentterminalsareunlikelytobeableto
printmessagesoninstanttickets);and
•
Returnallinstantticketstotheclaimant
(Werecognizethatconsiderationmustbegivenwhethera
reasonableandcost-effectivesolutiontoaccommodatethe
aboveexists)
•
Repositioningallretailterminalssuchthatitiseasyfortheticket
holdertoobservetheirticketsbeingchecked.Whereappropriate,
consideralternativessuchasamirrortoallowtheticketholderto
visuallyfollowtheirticketthroughtheprocess
•
Establishingandenforcingguidelinesrequiringthat:
•
•
Exceptforthe“silentseller’,allsurfacesinandaroundthe
RetailTerminalbeclearofallotherticketsorpiecesoflottery
paper,and
•
Novalidatedticketstoberetainedbehindoraroundthe
counter,and
Following-uponanydetectedcasesofnon-compliance.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 13
Retailers
Role of Retailers in Lottery Activities
Retailers’lotteryactivitiesareprimarilyfocusedon:
•
Sellinglotterytickets
•
Validatingticketsonbehalfoftheticketholder,and
•
Redeemingwinninglotterytickets(uptotheirspecifiedprizelimit).
Theinherentriskappearstobehigherfortheredemptionandvalidationprocess
thanthesaleofon-linelotterytickets.Therecommendationsprovidedinthe
previoussection,ifimplementedbybothOLGandticketpurchasers,would
significantlyreducethisrisk.Inthissection,weprovideadditionalobservations
andrecommendationsforimprovement.
Retailer Management
Wenotethateachretailerissubjecttoafinancialreviewforcreditworthiness
andisrequiredtoadheretospecificprovisionswithintheRetailerContract.The
currentstandardRetailerContract(October5,2006)containsaclausepermitting
OLGtoterminatethecontractiftheRetailerengagesinconductorpermitsan
eventoroccurrencewhichOLGatitssolediscretion,considersprejudicialtothe
interestsandreputationofOLG.
Weunderstandthattherenospecificguidelinesand/orpoliciesrelatingto
conditionswhichwouldtriggertheterminationclause.
Ourreviewofmajorwinfilesidentifiedthatafew“insiders”made
representationsand/orprovidedinformationthatsubsequentlywasidentifiedby
OLGasbeingfalse.Wedonotknowifthiswasdeliberateorunintentionalby
theclaimant.Wedidrecognizethatdoubtswereraisedandfollow-upwas
conducted.“Insiders”shouldclearlyknowtheirresponsibilitiesandshouldbe
fullycooperatingwithOLG.
Giventheincreasedfocusintherecommendationsforimprovedclaimant/retailer
interaction,itmaybebeneficialtoreinforceretailerrolesandresponsibilitiesfor
validationandredemptionoftickets.
WebelievethattheRetailerContractcouldbeenhancedbyaddingtermsand
conditionstopromoteimprovedRetailerbehaviours.Furthermore,increasing
theawarenessof“insiders”astotheirresponsibilitiestogetherwiththe
implicationsthereof,maysimplifytheinterviewprocess.
WerecognizethattheRetailerContractisdesignedtoprotecttheinterestsof
OLGandOntarians.Itwouldbebeneficialforinternalassessorsof“insider”
activitiestohaveveryspecificguidelinestoassistduringtheirprocedures.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 14
Furthermore,communicatingsuchguidelinesmayserveasadeterrentto
Retailers.
Recommendation Seven
Consideraddingthefollowingtermsandconditionsexplicitlyinthe
contract,gamerulesand/orOLGpolicies.Theseinclude:
•
Anyretailerorrelatedfamilymemberwhomakesafalseor
misleadingrepresentation(e.g.,duringaninterview)toOLGis
groundsforterminationoftheRetailContractand/orgroundsfor
invalidatingaticket(currentinterviewprocesswouldneedtobe
amendedtoaccommodatethis).
•
Anyretailernotfollowingspecificdirectivesrelatingtovalidation
andredemptionofticketsmaybeterminated.
•
Retailersarerequiredtohaveeachemployee(totheextent
includedinthereviseddefinitionofan“insider”)signadeclaration
thattheyunderstandtheirobligationstotheiremployerand
implicationsfrombeinganinsider.OLGwillneedtoassessthe
practicalapplicationandcost-effectivenessofimplementingthis
processgiventhesizeandconstantchangestothe“insider”
populationandthenumberofindividualsthatmaybesubjecttothis
atlargecorporations.
•
SpecificguidelinesrelatingRetaileractivitiesandconsequencesfor
non-complianceshouldbeprovidedtotheMajorPrizeOffice,
CorporateSecurityandSurveillance,InternalAuditandother
departmentsthatworkwithRetailers.
Increase Compliance Reviews at Retailers
Atpresent,OLGperformsinvestigationsofretailersasapartofitsescalation
proceduresforcomplaintsreceivedthroughitsCallCentre.Sales
representativesmakeperiodicvisitstoretailersmainlytosupportsalesinitiatives
buttheyalsoidentifyissuesfortheretailertoremediate.Presently,thereisno
specificchecklistusedtoconductretailerreviews;rathertheyareconducted
basedonanindividual’spersonnelexperience.Itmaybebeneficialtohave:
•
Periodiccompliancereviewsofretailersbyindividualswhoare
independentofthesalesforce,and
•
Astandardizedretailercompliancechecklistusedforconducting
reviews.
Recommendation Eight
Consider:
•
Implementingareviewprocessusingindividualswhoare
independentofthesalesforce
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 15
•
•
Increasingthefrequencyofreviewsbasedon:
•
Findingsfrompreviousreviewsorsimilarlocations
•
IncidentsorallegedincidentsreportedtoOLG
•
“Insider”wins,and
•
ResultsofreviewsofoneretailerthatisknownbyOLGtobe
relatedtoanotherretaillocation,and
Adoptingaspecifiedchecklistandguidanceforconductingsuch
reviews.
ResultsofsuchreviewsshouldbeprovidedtobothCorporateSecurity
andSurveillanceandtheAuditandRiskManagementCommitteeofthe
OLGBoardtogetherwithreportsonremedialactiontaken.
Termination of Retailers
OLGhasterminatedretailersunderthetermsoftheirRetailerContract.We
believethatincreasedclarityoftheconditionsforterminatingdealersandrigid
enforcementcanleadtoreducedrisks.
CurrentlyOLGdoesnottrackallincidentsorpotentialincidentswitheach
Retailer.Suchincidentsinclude:
•
ARetailerpresentingaforgedticketatthePrizeOffice
•
AwinninginstantticketbeingpresentedatthePrizeOfficeCounterby
aclaimantandthestatusofthewinningticketisCLAIMED-R(e.g.,
claimedatRetailer).CurrentprocessesstatethatRetailersare
supposedtodestroyticketsafterbeingvalidatedontheRetailTerminal.
Amountspaidarecharged-backtotheRetailerwhovalidatedtheticket
•
Voided/cancelledticketsbeingpresentedatthePrizeOfficebya
claimantandthestatusoftheticketisVoidedorNotFound,and
•
Anyofthe“thingsnottodo”outlinedinsection7(b)oftheOctober5,
2006RetailerContract.
Recommendation Nine
Reviewcurrentpracticesandpoliciesrelatingtoretailersand
consideringmoreclearlydefiningthecircumstancesthatwouldcausea
retailertermination.Clearlyimplementinganychangeinthesepractices
andpolicieswouldrequireOLGtoexerciseappropriatediscretionand
judgement.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 16
Insiders
Insiders
InourPhaseIreport,werecommendedthatOLGshouldconsiderareviewofits
definitionofan“Insider”.Atpresent,thereisnotacomprehensivedatabaseof
“insiders”thatcoversallpersonsdefinedassuchbyOLG’spolicy.Current
processesarehighlyrelianton:
•
Theinterviewdetecting“insiders”,and
•
Theintervieweevolunteeringthattheyarean“insider”.
Atpresent,thisissupplementedbyaPrizeOfficeemployeecomparingthe
claimant’snametothoseassociatedwithRetailer(i.e.,theowner,managerand
contactperson)wheretheticketwaspurchased.Ifthelastnamematches,
furtherfollow-upquestionsareasked.Thiscomparisonwouldnotdetectan
“insider”whohadpurchasedtheticketfromanotherRetailer,worksatanother
locationorisnotlistedasanemployeeofthatlocation.
Webelievethatabroadersearchofavailableelectronicinformationmaybeable
toenhanceOLG’sabilitytodetectan“insider”.Intheory,acomprehensive
onlinedatabaseofall“insiders”mayenhanceOLG’sabilitytodetect“insiders”;
buttheabilitytokeepsuchdatabaseuptodatemaybecost-prohibitiveand
impracticalsinceOLGwouldbereliantonthirdpartiesprovidingtimelyand
accurateinformation.
Evenifimplemented,theseprocesseswouldnotguaranteethatall“insider”
transactionswouldbedetected.
Recommendation Ten
Afterhavingrevisitedthedefinitionof“insider”,consider:
•
Enhancingthesearchprocessfordetectingpotential“insiders”to
encompassallcurrentlyelectronicallyavailabledatabaseswithinOLG,
and
•
Dependingontheadopted‘insider”definition,assesspracticalityof
expandingandmaintainingcurrently-heldelectronicdata.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 17
PrizeOffice
Prize Office Manual
OLGhasacomprehensivemanualforitsprocessesatthePrizeOffice.
“Insider”winfilesarereviewedbyInternalAuditforcompliancewith
procedures.
WehavereadthecurrentversionofPrizeOfficeManualandwehaveseen
evidenceofcompliancewiththeprocedurescontained.Nothingcametoour
attentionthatwouldsuggestthepoliciesandpracticesarenotfollowed.
Aswithallpolicies,theyneedtobeperiodicallyupdatedfornewinformationand
currentthinkinginotherjurisdictions(seepage28).Wenotedthatcertainminor
detailsneedtobeupdatedinthemanual(e.g.,mentionofthecurrentprocedure
toautomaticallycheckandwithhold,ifnecessary,forfamilyresponsibility
amounts(e.g.,alimony,childsupport,etc.),changesinnamesofcompanies
includedinthedefinitionof“insider”andreferencestolocations(e.g.,BloorSt)
tonameafewupdates).
Recommendation Eleven
Continueto:
•
Lookforopportunitiestoenhancepoliciesasnewpracticesare
adoptedinotherjurisdictions
•
UpdateitspoliciesandproceduresforthePrizeOffice(including
thosepoliciesoutlinedinourPhaseIandPhaseIIreports),and
•
Ensurethatallnamesof“insider”partiesarecurrenttotheextent
possible.
Retailer Paid Prize Policy
Wenotedthatthecurrentpolicy(RetailPaidPrizePolicy)permitsaretailertobe
reimbursedforaprizepaid(whichisovertheretailer’sspecificredemptionlimit)
toathird-party(i.e.,aretailermayrepresent/sendagreaterthan$300winning
ticketforaclaimanttoOLGforpayment).
IfOLGwantstotrackall“insider”activity,itshouldconsiderrevisingitspolicy
suchthatOLGwillonlypaytherightfulownerforamountsaboveretailer’s
specificredemptionlimit.
Recommendation Twelve
ConsidertheeliminationofRetailerPaidPrizePolicyasitrelatesto
prizesovertheretailerredemptionlimit.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 18
Interview Process
Afteraticketispresentedanddeterminedtobeamajorprizewinnerbycounter
staffatthePrizeOffice,theclaimantistakentothemajorprizeloungeareaand
interviewedbyanOLGPrizeOfficeemployee.Theinterviewisusedto:
•
Obtaincorroborativeevidencethattheclaimantpurchasedtheticket(or
isthelawfulowner)
•
Inquirewhethertheclaimanthassoleownership
•
Potentiallyidentify“insiders”,and
•
Obtaininformationforthemediarelease.
IntervieweeswaitintheareawhilePrizeOfficeemployeesconductthe
procedurestoproduceacheque.IftheinterviewleavesOLGuncertainabout
theclaimant’svalidity,anescalationprocesscommences.Thecurrentpolicy
manualstates,“Particularemphasisshouldbeplacedonsubstantiating
purchaseinformationandpreviousplayingstatistics”.
Wenotethattheinterviewprocesscouldbeenhancedthroughadditional
questionsrelatingtotheclaimantsfamilyandotherresidentsoftheclaimants
home.Aftertherelatedpartiesareidentified,questionscouldbeaskedto
determinewheretheidentifiedindividualswork.
Currentpoliciescouldbeenhancedbyprovidingadditionalguidancefor:
•
Whentoescalateclaimvalidationprocesses,and
•
Whattodowhenaclaimantcannotprovidepurchaseinformation.
Atpresentinvestigatorsand/orinterviewersdonotnecessarilyinvolvethe
primaryretailercontacts(e.g.,owner,manager,contact)foran“insider”winat
theretailerwherethewindoesnotinvolvethekeycontact.Suchinterviews
withkeycontactsmayprovideadditionalevidenceand/orquestionsthatcould
potentiallyberaisedforfollow-up.Toincreasetheeffectivenessofthese
supplementalreviews,theyneedtobeperformedassoonaftertheinterview
withtheclaimantasispractical.
OLGwillneedtoassesswhetherOLGhastheauthoritytorequiresuch
additionalinterviews.Furthermore,OLGwouldneedtoassesstherelated
implicationsoffreedomofinformationand/orprivacy.
Recommendation Thirteen
Considerestablishingpoliciesandproceduresthat:
•
Define:
•
Thecircumstanceswhereadditionalretailerinterviewsare
required
•
Whothespecificinterviewsshouldbewith,and
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 19
•
Thetimeframewithinwhichsuchinterviewsshouldbe
undertaken,and
•
Requiresuchinterviewsbeconductedimmediatelyaftertheinitial
claimant’sinterview.
•
Enhancetheinterviewprocessbyincludingthefollowing:
•
Obtaininginformationforallpeoplewhocohabitatewiththe
claimantandinformationaboutwheretheseindividualswork
andwheretheirparentsand/ordependentswork
•
Providingincreasedguidanceastowhentoescalatethe
validation-relatedprocesses
•
Clarifyingthepolicyrelatingtocircumstanceswherethewinner
cannotprovidepurchaseinformation,and
•
Redesigningthequestionsusedduringtheinterviewprocess
outlinedinSection7ofthePrizeOfficeManualandrelated
MajorPrizeWinFormtoinclude:
•
Whodoyoulivewithandwhatplacesofworkdothey
have?
•
Doyouhaverelativesandwhatplacesofworkdothey
have?
ThisinformationcanbeusedbythePrizeOfficetoidentifyand
scanthe“insider”databaseforpotentialmatches.
Handling of Tickets
Atpresent,ticketsdetectedaspotentiallyfraudulent:
•
Areplacedinaclearplasticbag,and
•
ArenotdirectlytouchedbyOLGpersonnel.
Thisprocessisusedtopreserveevidence(i.e.,fingerprints).
Intheeventthereisadisputeoveramajorwinticket,protectionofevidence
thatmaybeontheticketcouldbepreservedforfutureinvestigativeactivities.
Recommendation Fourteen
Considerhandlingallmajorwinticketsusingthesameprotocolas
potentiallyfraudulentticketstopreservepotentialevidence(e.g.,DNA
andfingerprints).Thispreservationmaybeavaluableresourcein
resolutionofafuturedispute,ifany.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 20
Clarification of Escalation
ThecurrentPrizeOfficeManualcoversseveralcircumstancesthatrequirethe
PrizeOfficetoinvolveCorporateSecurityandSurveillanceintheirprocesses.
Althoughinterviewersseemtouseprofessionaljudgementanddocumenttheir
findingsontheMajorWinInterviewform,itmaybeprudenttofullyarticulate(in
thepoliciesandprocedures)thespecificcircumstancesrequiringanescalation
ofaprizeclaimforfurtherinvestigationbyCorporateSecurityandSurveillance.
Thekeysforhavingeffectiveinterviewsinclude:
•
Providingtrainingtodeveloptheskillsformajorwininterviews.(i.e.,
considerthetypesoftrainingusedbymanyCorporationSecurityand
Surveillancepersonnel)
•
Havinginterviewsrecordedandaqualityreviewprocesstofollow-upon
questioningtechniquesrequiringenhancement.
Recordingofinterviewsmay:
•
Assistintheinvestigationof“insider”wins,and
•
Provideaqualitycontrolprocedureandanabilitytoprovidefeedbackto
interviewers.
Recommendation Fifteen
Ifpractical,consider:
•
ProvidingfurtherclaritywithinthePrizeOfficeManualsasto
whentoreferamajorwintoCorporationSecurityand
Surveillance
•
Whetherinterviewsformajorwinsshouldbeconductedby
personsfromthePrizeOfficeorfromCorporateSecurityand
Surveillanceforallmajorwins
•
ChangingOLGpolicyastothelevelofinvolvementof
CorporateSecurityandSurveillanceon“insiderwins”suchthat
aninvestigationisconductedonall“insider”wins,and
•
Recordingmajorwininterviewswhichcouldbereviewedby
otherstoprovideevidenceofprocesscompliance.
Access to Tracking of Incidents or Alleged Incidents involving
Retailers
Whenan“insider”winisdetectedduringaninterviewatthePrizeOffice,
CorporateSecurityandSurveillanceshouldberequiredtocheckthedatabaseof
incidentsorallegedincidentsoftheparticularretailer.Thereiscurrentlyno
requirementtodothis.Thisinformationmaybeoneofthecriteriausedto
elevatethedepthoftheinvestigativeprocess.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 21
Recommendation Sixteen
OLGshouldconsideramendingitspoliciestoincludecheckingof
incidentsorallegationsinvolvingaRetailerorother“insider”thatis
claimingaprize.
Counter Ticket Redemptions
TicketsarepresentedatthePrizeOfficeCounter.Thecounterrepresentative
checkstheticketintheredemptionsystemandinformstheclaimantoftheir
prize.Currentpoliciesrequirethefollowingquestionstobeasked:
•
“Isthisyourticket?”
•
“Areyousharingthisticketwithanyoneelse?”
•
“AreyouaffiliatedwiththeCorporationinanyway?”
Claimantsarethenrequiredtoprovideappropriateidentificationas(definedby
policy)whichiswrittenonaclaimform.
Thisprocesscouldbeenhancedbyenteringthecompleteidentification
informationintooneoftheOLG’ssystems.Similartotheautomatedchecking
forfamilyresponsibilityamountsowedbytheclaimant,thisinformationcouldbe
comparedtoavailableinformationfor“insiders”.
Recommendation Seventeen
ConsiderrevisingoneofOLG’scoresystemssuchthatallidentification
informationiscapturedforallticketredemptionsprocessedbyOLG
eitherinpersonorbymail.Suchinformationcanbeusedforanalysis
andtodetectunusualtrends.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 22
CallCentre
Current Call Centre Technology
Atpresent,OLGhas:
•
Atrainingprogramandperformancemanagementsystemforitscall
centreemployees,and
•
Callcentrestatisticsformanagingcallcentreoperations.
Currentcallcentretechnologydoesnot:
•
Recordcalls,and
•
Allowaqualityassuranceindividualtoanonymouslylistentoacall.
Quarterly,asupervisorsitsbesidetheemployeebeingreviewedandplugsa
headsetintotheemployee’sphone.Thequalityassuranceindividualprovides
feedbacktotheemployeebeingreviewed.Undercurrentpractice,employees
knowwhentheyarebeingmonitored.Thereisnoguaranteethatemployees
willanswerthecallsonsamebasiswhenthereisnoonemonitoringor
potentiallymonitoring.
Currentthinkingformanagingcallcentreoperationswouldsuggestthat:
•
Calldetailsbeautomaticallylinkedtothecallmanagementsystem
permittingareconciliationbetweenin-boundcallsandthe
documentationprocesses
•
Qualityassuranceproceduresareenhancedwhencallcentre
employeesknowthatanyoftheircallsbemonitoredorreviewedby
theiremployer,and
•
Recordingcallscan:
•
Assistwithemployeetrainingandperformancereviews
•
Provideanabilitytodiagnosewhetherthenatureofthecallwas
documentedappropriatelyinthecallmanagementsystem,and
•
Provideevidenceofprocessconsistency.
Recommendation Eighteen
Consider:
•
Definingwhatisconsideredtobeakeycall(e.g.,complaints,
transactions,terminalfreezecalls,etc.)
•
Upgradingthecallcentretechnologysuchthat:
•
Keycallsarerecorded
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 23
•
Supervisorscanalwaysanonymouslylistentoliveandrecorded
callsforqualityassuranceandtrainingpurposes,and
•
OLGhasamoreautomatedprocesstologandreconcile
incomingcallstoactionstaken.
Call Routing
Experienceshowsthatprocessescanbeimprovedwhencallswhichare
complaintsand/orallegationsarebetterhandledbyhighlytrainedpersonnelto
quicklydiagnoseandcommencethefollow-upprocess.
ByinformingcallersthattheircallisbeingprocessedthroughCorporateSecurity
andSurveillancecan:
•
Leadtofewerunfoundedcalls,and
•
RemoveanybiasthatmayresultfromtheCallCentreorPrizeOffice
handlingthecall.
Certainotherjurisdictionshaveimplementedthistypeofstrategy.Wenotethat
OLGhasrecentlycommencedtransferringcomplaintcallstoCorporateSecurity
andSurveillance.
Recommendation Nineteen
Consider:
•
Havingaseparatecomplaintlinethatroutesappropriatecallsto
highlytrainedindividualswhocanfullydiagnosethecallandgather
preliminaryinformation
•
HavingthesecallsgodirectlytoCorporateSecurityandSurveillance
(currentlycallsareredirectedbyCallCentrerepresentativesasa
partoftheescalationprocess),and
•
AdjustingstaffinglevelswithinCorporateSecurityandSurveillance
toaccommodatethecallvolume(ifrequired).
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 24
InvestigativeandInternal
AuditPractices
Investigative Process
Wewereprovidedwitharandomselectionofcopiesof220“insider”winfiles
coveringtheperiodfromJanuary1,1999toSeptember12,2006.Wenoted
that:
•
Oneoftheon-linegamefileswasasubscriptiontoLotto649(a.k.a.,
LottoAdvance);accordinglynomajorwinformwasrequired(sincethe
identityanddetailsofthepurchaseisknownbyOLG),and
•
144filesrelatedtoon-linegamesand75filesrelatedtoinstantwins.
For219filesrequiringamajorwinform,weexaminedthemajorwinformand
notedthefollowing:
On-line games
•
For144on-linemajor“insider”wins,OLGdocumentationindicated:
•
In90%ofthecases(129tickets),theclaimantwasabletoprovide
theplaceofpurchaseandarelatedtimeframeconsistentwiththe
electronicrecordsofOLG’ssystems.
•
In10%ofthecases(15tickets),furtherfollow-upwiththeclaimant
wasrequiredtoresolveticketownershiptothesatisfactionofOLG.
•
Inoneinstance,thelocationoftheout-of-townpurchasewas
eventuallyresolved.
•
Insixinstances,thedateofpurchasewaseventuallyresolved.
•
Inseveninstances,fileswerereferredforfurtherinvestigation
toCorporateSecurityandSurveillance.Theinvestigative
outcomeswereasfollows:
•
Inoneinstance,theretailerconfessedtotakinga
customers’ticket.OPPlaidchargesandtheretailerwas
foundguilty.Theticketownershipwasidentifiedvia
videotape.
•
Infourinstances,theinvestigationconcludedinfavourof
theclaimant.
•
Inthreeinstances,CorporateSecurityandSurveillance
raisedconcerns.
Instant Games
•
Forthe75instantmajor“insider”wins,OLGdocumentationindicated:
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 25
•
In15%ofcases,(11tickets)noexceptions(i.e.,dateofpurchase
andactivationwasthesame,andlocationofpurchase)was
matched.
•
In74%ofcases(63tickets),furtherfollow-upwiththeclaimant
wasabletoresolveownershiptothesatisfactionofOLG:
•
•
In36%ofcases,(27tickets)weremarkedasvalidatedatthe
identifiedlocation.
•
In38%ofcases,(28tickets)wheresystemscouldnotverifyall
thedetails;but,severaldetailswereconfirmed.
In1%ofcases(1ticket)wasreferredtoCorporateSecurityand
Surveillanceforinvestigation.Theinvestigationconcludedinfavour
oftheclaimant.
Wehavereviewed38investigationfilesincludingthoselistedassentfor
investigationaboveandmakethefollowingobservations:
•
Investigativefiles,subsequentto2004,containedanenhancedlevelof
documentationprovidingatrailofworkstepsconductedbyCorporate
SecurityandSurveillanceascomparedtofilesfrom2003andearlier.
•
Basedonourreviewofthepost-2003filedocumentation,the
investigativeprocessappearstobeconsistentlyappliedandrepresents
appropriatedocumentationstandards.
•
OLG’sapproachtoinvestigationtotheassessmentofownershipis
similartotheapproachadoptedbyotherlotterycorporations.
•
TheOLGinvestigativeprocessdiddetectonefraudulentclaimwhich
resultedinthewinningticketbeingreturnedtoitsrightfulowner.
•
Ofeightfilesreferredforfurtherinvestigation,fivefilesresultedin
observationsthatgaverisetopotentialdoubtsrelatingtotheclaimants
ownershipoftheticket.Thesewereelevatedtoseniormanagementin
accordancewithOLGpolicy.ThreefileswerecommunicatedtoOLG’s
AuditandRiskManagementCommitteeoftheBoard.Astatutory
declarationwaspreparedtosummarizetheeventsandcircumstances
asstatedbytheclaimant.Oncetheclaimantsignedthedeclaration,the
amountswerepaid.
•
OLGdecidedtouseanindependentthird-partyorganizationtoreviewa
significant“insider”winbyanOLGemployee.Thethird-partywasable
toestablishthatcorroborativeevidencelinkedtheticketpurchasetothe
purchaserandnoconcernswereleftunresolved.
Wewereprovidedwithawrittensummaryofcurrentinvestigativepracticesof
OLG.Wenotedthatthesewerenotformalizedinapoliciesandprocedure
manual.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 26
Recommendation Twenty
Formallydocumentthestandardinvestigativeprocessesrequiredwithin
OLG’spoliciesandproceduresmanualanddevelopspecific
documentationstandardsandguidelines.
Recommendation Twenty-one
Documentthespecificcircumstancesthatshouldresultin:
•
Aclaimant’sticketnotbeingpaid
•
Thematterbeingreferredtoathird-partyforfurtherinvestigation
•
Thematterbeingreferredtothepoliceofjurisdiction,and
•
Thematterbeingreferredtothecourtforresolution.
Thesecircumstanceswillrequireupdatingasnewcircumstancesare
uncoveredbyOLGorotherlotterycorporations.
Other Observations from Documentation Review
Mostticketpurchasesareanonymousandassuchabsoluteassurancelinking
theclaimanttolawfulownershipisnotpossible.OLGinvestigatorslookfor
corroborativeevidencethroughtheirinterviewsandinvestigations.Wenoted
thefollowing:
•
Themajorityof“insider”winclaimantsrepresentedthattheywerenot
awareofOLG’s“insider”winpolicybeforeitwasexplainedtothemat
thePrizeOffice
•
Thecorroborativeevidenceforproofofownershipisthetime,dateand
placeofpurchase.CurrentOLGsystemscapturethetimeofactivation.
Corroborativeevidenceforinstantticketsisnotasstrongason-line
ticketssinceinstantticketsareactivatedatthetimethepackagingis
openedfordisplay;whereason-lineticketsareactivatedattimeof
purchase.Someinstantticketsmayhavebeenactivateddaysbefore
thesaletotheticketholder;thereforetheexactdateandtimeof
purchaseisnotavailabletocorroboratewiththeclaimant’sinterview
responses.
•
Conclusionsreachedformostinvestigationsisthat“Noinformationto
indicatethattheticketisnotthepropertyoftheclaimant”.
Recommendation Twenty-two
Throughacontinuousawarenesscampaign,increasetheknowledgeof
the“insider”winpoliciesandsubsequentupdatestoallinsiders.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 27
PracticesFromOther
Jurisdictions
WiththeassistanceofOLG,wehaveobtainedinputfromthefollowing
jurisdictionsinNorthAmerica.
Canada:
AtlanticLotteryCorporation1
Lotto-Québec
BritishColumbiaLottery
Corporation
WesternCanadaLottery
Corporation2
US:
ArizonaLottery
OhioLottery
ColoradoLottery
OklahomaLottery
ConnecticutLottery
OregonLottery
DelawareLottery
PennsylvaniaLottery
MaineStateLottery
SouthCarolinaLottery
MissouriLottery
WestVirginiaLottery
WenotedthatOLG’scurrentpracticesarehighlyconsistentwiththoseofother
jurisdictions.Implementationofmanyoftheaforementionedrecommendations,
whiletakingintoaccountOLG’scurrentpolicies,proceduresandcontrols,
shouldbringOLG’scontrolenvironmenttoatleastequaltoorabovethoseof
otherleadingjurisdictions.OLGhasatrackrecordofenhancingitsprocedures
andcontrolsasnewenhancementsareidentifiedinotherjurisdictions.
Inreviewingtheprovideddocumentation,wenotedthefollowingpracticesthat
shouldbeconsideredbyOLGforimplementation:
•
•
1
2
CanadianPractices:
•
Allwinsgreaterthan$10,000aresubjecttoaninternalauditreview
•
Differentsoundsareplayedforwinningandnon-winningtickets.
Thesoundfornon-winningticketsindicatestoplayerthattheticket
hasbeenscanned
•
Allconsumercomplaintsaretransferredtothesecuritydepartment.
AtlanticLotteryCorporationservestheprovincesofNewfoundlandandLabrador,PrinceEdwardIsland,NewBrunswick
andNovaScotia.
WesternCanadaLotteryCorporationservestheprovincesofAlberta,SaskatchewanandManitoba,andtheterritoriesof
Yukon,NorthwestTerritoriesandNunavut.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 28
•
•
Retailersortheiremployeesarenotpermittedtopurchasetickets
attheirlocationwhileworking.(Thiswouldappeartobevery
difficulttoenforceandmonitorcompliance).
•
Ifanemployeewinsanyamountfrom$3,000to$10,000,an
investigationmaybeconducted.Ifanemployeewinsover
$10,000,afullinvestigationwillbeconducted.
•
CurrentpolicyallowsBritishColumbiaLotteryCorporationto
subjectaretailertoadditionalreviewprocedurestosubstantiatethe
legitimacyoftheclaim.Abudgetandtreasurydepartmentaswell
asasecuritycheckaredonetoensurethattherearenocomplaints
againsttheretailer.
•
Anywinof$10,000oroverbyanemployeeoranimmediatefamily
memberisconsideredan“insider”prizeclaim.Paymentisonhold
untilaninvestigationisperformedtodeterminethatthereareno
irregularities.
UnitedStates
•
•
Insiderplay:
•
Oregon,Colorado,WestVirginia,Missouri,OhioandDelaware
–Statutesprohibitemployeesandfamilymembersofthe
lotterycorporationtoplaylottery.
•
Oklahoma,Maine,Connecticut–Lotteryemployeesarenot
allowedtoplaylottery.
•
Arizona–Employmentcontractprohibitslotteryemployeesto
play.Theirnameandsocialsecuritynumberaretrackedto
detectandpreventemployeesplayingorclaimingthetickets.
•
Pennsylvania–Lotteryemployeesareprohibitedfrom
purchasingorsharinginlotterytickets.Nospouse,child,
brother,sisterorparentresidingasamemberofthesame
householdasthelotteryemployeemaypurchaseorshare
lotterytickets.
European
•
AtleastoneEuropeanjurisdictionisconsideringimplementationof
aplayeridentificationcardsystemthatcouldlinkaplayertoanonlineticketpurchase.
Thiscardwouldbeswipedpriortotheprocessingofaticket
purchase.Thekeybenefitofthiswouldbetolinktheactualticket
purchasetoaspecificindividual.Itisunlikelythateveryperson
purchasingaticketwouldwantthisfeature;butifimplementedall
“insiders”couldberequiredtouseit.
Wedonothaveaccesstothecostestimatesorimplicationsof
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 29
suchasystemongamingand/oritslevelofacceptancebyticket
purchaserstoassessthepracticalityandeffectivenessofthis
initiative.
OLGmaywishtoexploretheImplementationofaPlayer
IdentificationCard.Itmustberecognizedthatifallpurchasers
signedtheirticketsatthetimeofpurchase,theremaynotbea
needforthiscontrolfeature.
Recommendation Twenty-three
Considereachoftheitemsoutlinedaboveandassessviabilityand
effectivenessofimplementingthepracticefromtheotherjurisdictions.
Phase II Report – Lottery Review
November 23, 2006
For the Internal Use of
Ontario Lottery and Gaming Corporation
Page 30