Atlantic Lotto jackpot wins by 'related parties' jump 45%

The Atlantic Lottery Corporation says the number of big jackpots won by "related parties" to the organization last yearjumped 45 per cent, an amount an ALC consultant hadcautioned in March could signify fraud.

But Jacques Allard, the University of Moncton statistics professor who delivered that warning four months ago, says he has since rethought the issue and believes the latest increase is not a concern.

"I would not be up in arms," Allard told CBC News on Friday.

Allard said he thinks more thorough reporting requirements for insiders who now have to sign an oath before collecting big prizes has begun to flush out, the true number of inside wins that likely went unrecorded in the past.

"The progression in the number of related party wins of $10,000 and above basically coincided with the introduction of new measures to identify them," said Allard.

'Related' wins represent 14% of all big wins

Inits annual Accountability Report, released on Thursday, ALC says 64 jackpots over $10,000 went to someone with some connection to the lottery in the 2011/12 fiscal year.

That's up from 44 jackpots reported the previous year and represents 14.1 per cent of all big jackpots won in the region.

ALC spokesperson Courtney Pringle-Carver says the 64 big prizes were worth a total of $5.9 million.

'If the relative number of $10,000+ Non Arms Length winners does not decrease, attention should be given to potential fraud.' Jacques Allard's March report

The win rate is nearly triple the 5.6 per cent of the adult Atlantic Canadian population, ALC estimates has some connection to the lottery.

In March, Allard produced a study showing insiders had won 8.2 per cent of lottery prizes over $10,000 in Atlantic Canada in the previous four years andcautioned ALCto act if the number got any higher.

"Further investigation would be warranted if the relative number of $10,000+ Non Arms Length winners further increases," Allard wrote.

"If the relative number of $10,000+ NAL (Non-Arms Length) winners does not decrease, attention should be givennot only to potential fraud but also to changes in the NAL identification process, to NAL players gaming preferences and to NAL players gaming intensity for specific games."

Insiders play more, says professor

But with those numbers jumping significantly this year, Allard now says he's come to believe insiders probably just play the lottery significantly more than the average citizen, a possibility he also raised in his original report.

"At this point I would consider the numbers we observe are reasonable," he said.

ALC still reports that those same insiders win only four per cent of prizes below $10,000, but Allard says he believes that is a case of gross under reporting and that insiders probably take home up to 14 per cent of those prizes as well.

ALC generated $369 million in profit in the most recent fiscal year, according to the annual report.

The corporation, owned by the four Atlantic provinces, says that money went back to the provincial governments to pay for services, such as health care, education and roads.

New Brunswick received $120 million, Newfoundland and Labrador$107.8 million, Nova Scotia $126.9 million and Prince Edward Island, $14.9 million, the report states.

In addition, $362 million went to players in the form ofprizes and $127 million in commissions to retailers.