TORONTO - Ontario lottery retailers are railing against a proposal to ban them from buying and cashing in tickets in their own stores, saying it unfairly portrays them as the villains in the province's lottery scandal.

"Retailers will be upset that we're the ones being painted as the bad guys in all this," says Chris Wilcox of the Ontario Convenience Stores Association.

The Ontario Lottery and Gaming Corp. tried to impose the rule on retailers in August before backing off in the face of the association's vocal opposition.

In an electronic bulletin sent to several "key" accounts, the provincial government agency notified merchants that, starting Sept. 17, lottery retailers and their staff would no longer be allowed to purchase or redeem personal lottery tickets at their own retail sites.

If they wanted to play the lottery they would have to do so at another location, the bulletin read.

"Well they backtracked on that rule, it was at the request of retailers," said Wilcox. "There was a bit of an outcry from retailers on this."

While the rule was not imposed in September, the OLG has made it clear it's still on the table.

"Once (retailers) received the electronic file and had a chance to look at it, we were contacted by them to say they'd like to have more discussion about this suggestion," said spokesman Jim Cronin.

"We understand that, and that's what happened... (but) there hasn't been a decision on this."

Wilcox says he expects to hear shortly whether the lottery corporation will go forward with the rule. If such a ban is brought in, Wilcox said lottery merchants will voice their discontent - again.

The proposed rule, similar to one already in place in British Columbia, follows a scathing report into the corporation's handling of fraud and theft issues.

Ombudsman Andre Marin found "unscrupulous" lottery-ticket retailers in Ontario collected at least $100 million in fraudulent claims since 1999, partly because the OLG was "hopelessly conflicted" and ignored allegations of fraud because it was "fixated on profit rather than public service."

Marin, however, did not advocate banning lottery retailers from buying tickets nor did he explicitly request prohibiting them from buying and redeeming tickets at their own stores.

Discussions between the OLG and retailers have also included talk of retailers receiving personal identification numbers. Under such a system, merchants would have to punch in their PIN before buying personal tickets, allowing the agency to better track retailer play and wins, said Wilcox.

Cronin said that was among the "other options" the corporation was looking at.

The lottery scandal dogged the Ontario government throughout the spring, with repeated opposition calls for the resignation of Public Infrastructure Renewal Minister David Caplan, whose ministry oversees the OLG.

The lottery corporation put the rule on the backburner just weeks before the provincial election, which returned the incumbent Liberals to power and saw Caplan win his seat, but ministry spokesman Amy Tang said politics has "definitely not" played a role in the timing.

"Clearly some consultation was needed on (the rule), so that's what (the OLG) undertook to do," Tang said.

"The ongoing goal is to ensure public confidence in the system. That work needs to continue regardless of change in government or election time."