Bet on It: Lottery Is Fair Game in Capitol

SACRAMENTO —  Despite Gov. George Deukmejian’s insistence that major changes should not be made in the voter-approved lottery initiative, legislators have introduced about 30 bills that would affect the lottery.

The bills concern everything from whether the lottery can deal with companies doing business in South Africa to establishing qualifications for those selling lottery tickets.

Even Deukmejian agrees that there is a need for some legislation to clear up a few problems with the lottery initiative, which was largely financed and drafted by the nation’s largest lottery ticket supplier, Scientific Games Inc. of Atlanta.

The legislative interest in the lottery, however, has gone far beyond fine tuning.

A small army of lobbyists is at work urging changes in the voter-approved initiative that would give some companies an advantage over others in getting a share of the lottery business.

Lobbyists Hired

According to records in the secretary of state’s office, at least nine companies that hope to get a share of what could quickly become a $1-billion-a-year business employ lobbying firms to represent them in the Capitol and before the state Lottery Commission.

Several of these companies, including Control Data Corp. and General Instrument Corp., have other, non-lottery interests in the state and have long had lobbyists here.

General Instrument, one of a handful of lottery computer suppliers, also sells the computerized betting devices used at horse racing tracks around the country.

In recent years, the company has hosted numerous state legislators and their families on trips to New York. Last April, for example, Sen. Paul B. Carpenter (D-Cypress), Sen. Herschel Rosenthal (D-Los Angeles) and Assemblyman Frank Vicencia (D-Bellflower) and their wives were treated by the company to limousine service, a Broadway show, hotel accommodations and dinners. The total tab, according to the legislators’ required disclosure statements, was more than $3,400.

Vicencia also reported receiving an additional $3,485 for “airline, hotel, food and beverage, entertainment” last summer from Ticketron, whose parent firm is Control Data Corp., one of the leading suppliers of on-line computer services to state-run lotteries.

$10,000 to Brown

Some of these companies have also been making sizable campaign contributions. Scientific Games contributed $10,000 to Assembly Speaker Willie Brown (D-San Francisco) for a September fund-raiser, for example.

Assembly Majority Leader Mike Roos (D-Los Angeles) got a $10,000 campaign contribution last October from G Tech Corp., another company that provides computerized lottery services.

The lobbying, the campaign contributions and travel-related gifts are legal. The activities show that companies with an interest in the lottery already are doing their best to influence public officials in California.

Senate President Pro Tem David A. Roberti (D-Los Angeles) told reporters earlier this year that several of his legislative colleagues see the lottery issue as a source of campaign contributions.

Roberti and other legislators say they want to avoid meddling with the lottery initiative for fear that, if anything goes awry, the Legislature--rather than Deukmejian and the Lottery Commission that he appointed--will be blamed. He predicted that few changes would win legislative approval.

Nonetheless, a long list of bills is before the Legislature. Many of the measures have not had a hearing and seem likely to fade quietly away. Others are what legislators call “spot bills”--measures that are put into the legislative machinery with the knowledge that they can later be amended quickly to accomplish some other purpose.

Dills’ Bill

Much of the attention in the Capitol is on a comprehensive bill authored by Sen. Ralph C. Dills (D-Gardena), who chairs the Senate Governmental Organization Committee. The measure won easy approval in the Senate on a 33-1 vote but has bogged down in the Assembly.

In its present form, Dills’ bill would remove the requirement that officers, parent corporations and subsidiaries of lottery suppliers must submit personal income tax statements for the last three years before bidding on lottery contracts.

During the fall campaign, opponents of the lottery initiative argued that the income tax filing requirement would favor Scientific Games, whose officers already are required to make similar disclosures in New Jersey, where a related company runs a hotel-casino.

Other companies have been lobbying hard to ease the income tax disclosure requirements.

As his bill moved through the Senate, Dills added amendments requested by the California Grocers Assn., which was particularly disturbed that grocers choosing to sell lottery tickets might have to keep large amounts of prize money on hand. The Lottery Commission can require that ticket sellers have enough cash on hand to pay prizes of up to $600. The grocers wanted that amount lowered to $20.

Dills has dropped the grocers’ amendments.

But Assembly Democrats have added a controversial amendment of their own, requiring that large contracts go only to companies that agree to give 30% of the contract to businesses run by minority groups and women.

Opposed by GOP

This amendment would go beyond existing state law, which requires that minority contractors be given some preference.

Contending that the minority contracting amendment goes too far, Assembly Republicans have said that they will block the measure when it comes to a final vote if that provision is still in it. Under the terms of the voter-approved initiative, any change in the lottery statute requires a two-thirds vote of the Legislature--giving the 33 Republicans in the 80-member Assembly the ability to stop any changes if they vote together.

The governor’s aides have said that he would veto the measure if it contains the minority hiring provision.

Deukmejian apparently likes several other aspects of Dills’ bill. At the governor’s request, the Assembly Governmental Organization Committee added a provision that would allow the state Department of Personnel Administration to increase the salary for the lottery director.

Deukmejian recently disclosed that the person he chose for lottery director turned down the $73,780-a-year job at the last minute because the salary, set by the initiative, is too low.

Unresolved at Break

Presumably, a larger salary would make it easier to attract qualified candidates for the position.

As the Legislature shut down for its spring break, the fate of Dills’ bill was still uncertain.

Meanwhile, there is a growing feeling that the lottery will be launched without any legislative changes, however desirable.

That may suit many Democrats, who see every delay and misstep in starting the lottery as a potential liability for a Republican governor who will be seeking reelection next year.