Background of the mandate
Realization of the mandate
The KPMG report
Everything about the integrity of operations at Loto-Québec involves our duty to always proceed with caution, and requires constant vigilance on our part.
This is truly a fundamental matter for Loto-Québec, and explains the measures we took following an October 25, 2006 broadcast by CBC television's The Fifth Estate that reported that the number of wins by Ontario Lottery and Gaming Corporation retailers was higher than that among the general population.
Once informed of this, Loto-Québec reacted quickly by ordering an in-house search to determine whether the same situation applied. In-depth analysis, using the same ratio as that used in Ontario, i.e. that retailers play 2.8 times as much as an average player, concluded that when their respective rates of play was considered, "there is no reason to think that Loto-Québec retailers win more frequently than other lottery players."
Samson Bélair/Deloitte & Touche validated this conclusion on the basis of hypotheses that were provided and calculations of probabilities with respect to available statistical norms. When Loto-Québec made the results of this analysis public on December 21, 2006, it undertook to remain vigilant and reinforce its control measures in the light of the reports of the Ombudsmen of Ontario and British Columbia.
Despite being reassured by the statistics dealing with wins by its retailers, Loto-Québec decided to go further and ensure that risks associated with prize payment procedures were reduced to a minimum.
On March 28, 2007, just two days after the report by the Ombudsman of Ontario was published, Loto-Québec's Board of Directors passed a resolution requesting that an outside firm specialized in the gaming sector be mandated to examine the corporation's processes and procedures so as to be certain that risk was properly managed, and propose any improvements that might be required.
The Board of Directors also requested that the Vérificateur général du Québec who has been responsible for auditing Loto-Québec since its creation, be informed of the results of the mandate for purposes of requesting an opinion.
At the conclusion of a bid process, the KPMG consulting firm was given this mandate on April 7, 2007.
As mentioned above, Loto-Québec retained the services of KPMG to examine its processes and procedures as related to prize payment to ensure that risk is properly managed and, as the case may be, propose improvements.
KPMG discharged its mandate using a business risk-based approach. Loto-Québec's concern was that every aspect of the proper functioning of its business should be looked into to ensure that consumers remain confident at all times of receiving amounts that are due them.
Prize payment operations were analyzed for terminal games, passive lotteries (drawings) and instant lotteries (scratch tickets), and in particular for the following procedures:
- Ticket printing and security
- Activities related to claiming of prizes at Loto-Québec and at retail outlets
- Complaint and investigation management
KPMG examined the practices employed by Loto-Québec in the spring of 2007, with a view to suggesting areas for improvement.
The KPMG report as submitted to Loto-Québec on October 11, 2007 identified 35 areas for improvement. Subsequently, Loto-Québec sent the KPMG report on to the Vérificateur général du Québec for an opinion, as it had undertaken to do. In November, Loto-Québec's President and CEO submitted a detailed action plan to the Board of Directors for each of the areas for improvement that were recommended by KPMG.
To learn more, Loto-Québec suggests that you consult the report produced by KPMG (in French only).
Rapport KPMG - Revue des processus et procédures de paiement des lots
[PDF Format, 922 KB - Help, online October 23, 2007]
October 23, 2007 Press Release