A headline appeared on CP24’s website recently. The bulletin read, “Markham residents must wait to claim lottery prize as OLG conducts enhanced review of ‘insider win.’” Immediately, most of Lottery Geeks’ readers might’ve thought, what’s an “insider win” regarding lottery draws? Can people game the system?
As Lottery Geeks eventually discovered, the term isn’t as sinister as it sounds.
An Ontario Lottery and Gaming Corporation (O.L.G.) spokesperson reiterated that these “Insiders” can’t game the system.
From Lottery Geeks’ review, these “Insiders” aren’t creating illicit algorithms or hacking the lottery website to put out the winning numbers of their choosing.
According to O.L.G.’s spokesperson, an “Insider Win” consists of someone who works for the Corporation winning a lottery draw of any size. These people aren’t considered “Related Parties.” If people who aren’t “Related Parties” fit the proper criteria, they can participate in draws, claim prizes if they win, and all the good stuff.
The next question then becomes: What are “Related Parties?”
As per O.L.G.’s specific rules, “Related Parties” are considered:
- Persons under the age of 18 years of age;
- Employees of O.L.G.
- Members of O.L.G.’s board of directors;
- Individual consultants or public sector employees retained by O.L.G. through contracts of retainer for periods of 30 calendar days or more in the aggregate;
- Members or employees of the Alcohol and Gaming Commission of Ontario;
- Ontario Provincial Police officers that have been assigned to the A.G.C.O;
- Directors, officers, partners, and sole proprietors of O.L.G.’s authorized retailers (at the locations in which they are employed or associated with);
- Employees of O.L.G.’s authorized retailers who handle (including activation, sale, validation or redemption) lottery tickets in the course of their employment (at the locations in which they are employed or associated);
O.L.G.’s website also states that “in addition to the ‘Related Parties”‘ listed above, as it relates to lottery tickets purchased on OLG.ca only, O.L.G. designates the following additional individuals as “Related Parties”:
- Members of the board of directors, officers, or partners of both O.L.G.’s internet gaming service providers and their subcontractors that are engaged in the provision of software, systems, products or services relating to the O.L.G.’s conduct and management of lottery schemes on OLG.ca;
- Employees of both O.L.G.’s internet gaming service providers and their subcontractors that are engaged in the provision of software, systems, products or services relating to the O.L.G’s conduct and management of lottery schemes on OLG.ca;
- Consultants and contract employees retained by O.L.G.’s internet gaming service providers and their subcontractors through contracts of retainer for periods of 30 calendar days or more in the aggregate;
- Any affiliate, subcontractor or subsidiary of O.L.G.’s internet gaming service providers, or any entity retained directly by OLG to provide software, systems, products or services relating to O.L.G.’s internet gaming platform(s).
With the information provided by the O.L.G. on “Related Parties,” it might seem like no one with any connection to the corporation can win. However, there are some exceptions. Once again, going back to O.L.G.’s rules on “Insiders”:
O.L.G. designates the following individuals, groups or organizations as “Insiders” who are eligible to play lottery, but are subject to enhanced scrutiny:
- Authorized retailers and sellers of O.L.G. lottery products and services at retail locations they are not affiliated with;
- Employees of the Interprovincial Lottery Corporation (I.L.C.);
- Employees of other Canadian regional or provincial lottery agencies, regional marketing organization or corporation (other than O.L.G.);
- Lottery Suppliers to O.L.G. who are involved in the sale, redemption, distribution or manufacturing of lottery products, equipment or services;
- Employees that perform Independent Audit, Advisory or Security Services for O.L.G.;
- Registered Gaming Assistants of an O.L.G. authorized Retailer or O.LG.’s internet gaming service providers;
- Executives or staff of a Trade Union who represent or negotiate on behalf of employees at the Authorized Retailer, O.L.G.’s internet gaming service providers, or Casino;
- Employees of registered suppliers that maintain or repair lottery equipment or software (whether on site or remotely) at an O.L.G. authorized Lottery Retailer, O.L.G. online gaming website or at an Ontario Casino;
- Employees of the Ontario Ministry of Finance or Ontario Ministry of Attorney General who have lottery specific oversight; and
- Family members or any other relatives who reside with the Insider or Related Party (as defined above) will be treated as Insiders.
- Immediate family members of a person as defined above (whether living in the same residence or not) will be treated as Insiders.
In easier-to-understand terms, if a person has ties to the product’s development or is closely aligned with O.L.G. or its partners, there’s a strong chance they would be considered “Related Parties.”
They wouldn’t be allowed to buy tickets or participate in any “games,” let alone win a draw.
An example of someone who can buy tickets and win a draw is a person who works at a gas station that sells O.L.G.-related products but buys them from another retailer–the key being they don’t purchase the product from where they work. In other words, your minimum-wage gas station clerk or someone from that walk of life can get lucky without too many repercussions IF they follow the rules.
Distant family members of “Related Parties” can also legally win. Of course, any win by people who fit these descriptions is scrutinized by O.L.G.— usually through a 30-day reviewal process for wins of $10,000 and up.
What happens in these review processes? Lottery Geeks reached out to a few sources in the gaming industry for insight. The consensus was these reviews check to ensure the “Insider” won the prize fairly. What these reviews check for varies explicitly from state to state and province to province.
The gaming industry sources Lottery Geeks spoke with said more often than not, everything turns out OK. The “Insider” gets their prize, and the clock keeps on turning. The review process for “Insiders” was implemented to offer peace of mind.
Why would lottery corporations want peace of mind? Corruption can occur without a proper system to keep “Insiders” honest.
In our research, Lottery Geeks found an alleged O.L.G. retailer scandal in 2013, which led to this story, stated in the article’s introduction, “which ended up becoming major front-page news in Canada and leading to numerous consequences including legislative debate, the firing of two CEOs, several criminal charges, jail time, and payouts totalling over $20 million.”
According to the author of the 2013 article, University of Toronto’s statistics Professor Jeffrey S. Rosenthal, some fishy business was happening.
Speaking with Lottery Geeks, Rosenthal said, “In a seven-year period between 1999-2006, our statistical analysis suggested that probably over 100 of the major ($50,000 and above) Ontario lottery prizes were unfairly claimed by ‘Insiders.’ That works out to about 15 a year.”
In response to Rosenthal’s findings, he said, “O.L.G. did make some changes to their
rules and procedures, which may have helped the situation.”
Are these changes working as intended? A brief follow-up study by Rosenthal and his peers suggested “that the problem did still persist.”
Is this just an isolated problem? Rosenthal alleges “Insider” corruption is more extensive than Ontario in scope. “Other investigations indicated that similar insider win problems occurred frequently in other jurisdictions, too.”
Sources embedded within the gaming industry told Lottery Geeks the review process is continually evolving to ensure that any corruption by “Insiders” can be phased out and prizes claimed by said “Insiders” are won fairly–by the book.
