Another lottery gamble

(Editorial published in the Globe and Mail, October 26, 2006.)

Imagine that you are trusting enough to give your provincial lottery ticket to a store clerk to learn whether you have won. Imagine that, against astronomical odds, the ticket is worth a lot. The vast majority of retailers and clerks will tell you the truth. But, on the evidence of an episode of CBC's the fifth estate scheduled to air last night, a number will lie. They will say you won only a tiny prize and will collect the major one themselves. Yes, there are all sorts of mechanisms to prevent that from happening, including self-serve ticket checkers and machines that play different tunes depending on how much money a ticket has won, but it happens.

One case in Ontario has become public, though the Ontario Lottery and Gaming Corporation (OLGC) has worked hard to keep some details secret. Bob Edmonds, now 82, bought a ticket in 2001 worth $250,000, but a variety-store owner told him he had won only a free ticket. Mr. Edmonds grew suspicious when he later read that the store owner had won the big prize. An OLGC investigator had concerns as well, but the corporation paid the retailer the money. It was only when Mr. Edmonds went to the police, and the police began investigating, that an e-mail was sent within the OLGC suggesting that Mr. Edmonds' claim was legitimate.

Even then, nothing happened. The OLGC fought Mr. Edmonds until 2005, settling with him just as a civil jury was about to pronounce on the case. The corporation incurred $425,000 in legal costs, far exceeding the amount Mr. Edmonds should have won in 2001. And it required that the settlement be covered by a confidentiality clause a demand that Mr. Edmonds's lawyer plans to contest in court next Monday, on the excellent grounds that an agency of government should not keep such secrets from the public.

The OLGC says the Edmonds case was isolated and insists it keeps a tight rein on those who sell its tickets (lottery mechanisms vary across Canada). The math would suggest otherwise. Initially, using an OLGC figure of 60,000 retailers and clerks in Ontario, the fifth estate asked Jeffrey Rosenthal, author of Struck by Lightning: The Curious World of Probabilities, what the odds were of those clerks winning nearly 200 times in the past seven years with an average prize of $500,000. Dr. Rosenthal's answer: one chance in a trillion, trillion, trillion, trillion. According to the CBC, the OLGC last week said it really had closer to 140,000 retailers and clerks; even at that, Dr. Rosenthal said, the chance of so many winning so much was extremely unlikely.

Mr. Edmonds's case would appear not so isolated after all. The Ontario government has ordered an internal review of its lottery system. For its part, the lottery corporation should remove the muzzle from Mr. Edmonds and let the public know the details of the settlement it reached. And, as always, buyer beware.

[Jeffrey Rosenthal's Home Page / Struck by Lightning Page / Contact Page / Media Page]