TORONTO - Ontario's alcohol and gaming commission will take over the investigation of all suspicious lottery wins -- including those claimed by lottery retailers -- starting in January as the lottery corporation tries to rebuild its tarnished image and crack down on the appearance of fraud.

The Ontario Lottery and Gaming Corp. said Tuesday the commission will investigate all insider wins over $10,000 after the province's ombudsman criticized the cozy relationship between the corporation and the thousands of retailers who sell -- and buy -- its products.

Teresa Roncon, spokeswoman for the lottery corporation, said the definition of a lottery "insider'' is also being broadened to include family members and any person living with a retailer or gaming corporation employee. Those who try to collect wins of under $10,000 will be better tracked and monitored through a new database, she added.

"This will provide our customers with a greater amount of security and greater integrity in our lottery product,'' Roncon said.

"That's the priority at OLG. We've been working very hard on this for many months.''

The moves come after a scandal earlier this year sparked by a disproportionate number of jackpot wins by so-called lottery insiders.

In his report earlier this year, ombudsman Andre Marin slammed the corporation for ignoring allegations of widespread retailer fraud, "coddling'' ticket sellers and playing "games'' with customers who complained they had been cheated.

Confidence in the province's lottery system was shattered because the corporation lost sight of its obligation to the public in its desire to maintain a good relationship with some of its best customers -- retailers, the report suggested.

The gaming corporation has implemented about 80 per cent of Marin's recommendations, Roncon said, and is making "great headway'' with the remaining suggestions.

Following one of the key recommendations, the lottery corporation will be regulated by the Alcohol and Gaming Commission of Ontario beginning in January, and all customers will be required to sign their tickets to crack down on potential fraud.

David Caplan, minister of public infrastructure renewal and minister responsible for the lottery corporation, said when OLG was first set up it was assumed it could be both the seller, investigator and judge when it came to suspicious wins.

"That simply didn't work,'' Caplan said.

"By putting these measures into place, the public can and should have full confidence that their interests are being protected and there is a fair game.''

Still some critics say the corporation has a long way to go. New Democrat Andrea Horwath said she wants the corporation to establish a code of conduct for retailers, and require them to pass criminal background checks before being allowed to sell tickets.

There is also no mention about what will happen to retailers who are found guilty of fraud, said Horwath. Marin's report suggested those assets be frozen, she added.

"Ontario families deserve that kind of scrutiny so they can regain trust in the system,'' said Horwath,who noted that Caplan never should have been returned to the post following the October election.

"There is no doubt that they have been scammed in the past and there needs to be a total shake-up.''

Conservative Bob Runciman said there are still a lot of unanswered questions surrounding the scandal -- and the role key Liberals played -- because the legislature was never able to refer the issue to a standing committee.

There were also suggestions that the alcohol and gaming commission had an "incestuous relationship'' with the OLG, which could make the commission a questionable overseer, Runciman added.

"There should be some sort of protocol with respect to that kind of a situation developing,'' he said.