California set to take a chance on state lottery. Residents are wary of game's effect on children and the poor

The world's biggest lottery ever begins today in California, run by a state government that has been wary of it from the beginning. California joins the other lottery states with a splash. State officials intend to sell at least a billion lottery tickets their first year for a dollar apiece -- totaling half the amount raised by all the lotteries in the country last year. Of that billion dollars, at least $340 million must be handed over to California public schools.

The money notwithstanding, the state has not readily embraced the lottery. Last year, 58 percent of California's voters approved a ballot initiative for a lottery -- a small margin compared with lottery initiatives elsewhere. Gov. George Deukmejian says he voted against it, and, by most accounts, so did most state legislators, including the author of the most recent bill passed on managing the games and monies.

Even the lottery commissioner William Johnston, former Los Angeles school superintendent, who gave talks last year on the bad example the state would set for children by promoting gambling, voted against it.

The California Teachers Association is neutral on the lottery: ``We like getting the money, but because of the means by which we're getting it, we're neutral,'' says a spokesman.

``The biggest worry I have,'' says state school superintendent Bill Honig, ``is that people will think education is getting all this money and doesn't need any more.'' In fact, in education spending, the $100 to $200 per student expected from the lottery each year is about ``one-fifth of what we have to spend to catch up with the other industrialized states,'' he says.

The lottery is a mammoth business, organized in the space of a few months. Ground was broken for the Sacramento headquarters four months ago; already it has 300 employees. It is backed by a second headquarters in southern California, 10 field offices set up around the state, and 20,000 retail outlets -- newsstands, convenience stores, supermarkets, video shops -- chosen to sell lottery tickets.

The initial game will be one where players scrape each of six squares on a card. Matching three squares wins from $2 to $5,000, with a further chance of winning $2 million.

Of the 16-to-18 million adults in California, says lottery director Mark Michalko, ``I think it's reasonable to assume that at least two-thirds of those people will try it at least once.''

``This kind of game is accepted by a broad range of people -- mainly middle-income people playing with discretionary income,'' he adds.

A common criticism of lotteries is that, as a form of taxation, they draw most heavily on the poor. But Mr. Michalko cites studies by the National Association of State Lotteries that indicate most lottery games are played by people in the medium-income range, not the poor.

But people who have observed lines for lottery tickets in other states say ethnic minorities and lower-middle class whites are heavily represented.

``All the social ills that follow other forms of gambling will, sooner or later, appear with the state lottery,'' says John Steele with the Maryland Treatment Center of the National Foundation for the Study and Treatment of Pathological Gambling. Chief among them, is people playing who can't afford it, he says.

There is no evidence that state-run lotteries lead directly to compulsive gambling, according to Mr. Steele. But they do make gamblers of people not previously exposed to the gambling world -- housewives, for instance, who would not have ventured into illegal numbers games or were never interested in horsetrack betting. After eight years of a state-run Maryland lottery, the treatment center has seen an increasing number of women with gambling problems, he says.

For whatever reason lotteries are started, they soon develop an institutional life of their own, says George Sternlieb, director of the Center for Urban Policies Research at Rutgers University. ``In short order, the tame housecat becomes a tiger.'' In his view, states get hooked on the jobs and the revenue the lottery provides, retailers become a lobbying force for their share of the tickets they sell, and the lottery directors' careers depend on how much money they raise.

``What we're seeing now [in states that have had lotteries for several years] is that after the initial novelty wears off, they have to keep jazzing it up,'' says Dr. Sternlieb.

This usually means heavy advertising, huge publicity-getting prizes, and development of new games.

California officials are now most concerned that education will receive the benefit of lottery revenues without losing any regular funding.

Superintendent Honig is urging school districts to use lottery money for special projects or purchases, and not build it into their basic budget, ``because it's not dependable income.''