Preparations for the debut of the D.C. lottery Aug. 23 are in full swing, and sales representatives from the company organizing the game are encouraging local retailers to apply for licenses to sell tickets.

Games Production, a joint venture of a local minority firm, Games Production Inc., and Scientific Games Production Inc. of Atlanta, reports that about 480 applications to sell tickets for the lottery, which will offer prizes up to $1 million, have been received by the D.C. Lottery Board, and that about 350 outlets have been licensed.

Games Production Inc. general manager Gloria Decker, who was executive director for the New Jersey lottery when it began in 1970, said many retailers don't realize the lottery is about to begin. "People know the lottery is coming," Decker said, "they just aren't aware of when."

To be eligible for a lottery-ticket license, Decker said, a business must be licensed as a retailer in the District or have a certificate of occupancy for such a business, and must owe no taxes. Excluded are businesses whose owners have been convicted of a felony within the past five years. A bonding fee of $15 is required.

Businesses will receive a 6 percent commission on the sale of each ticket, which will cost $1.

The District will have an "instant lottery," which is played by rubbing a latex cover from the card. When the three numbers on the card are the same, the player wins the amount of the number. For example, three '3's would win $3.

Players who win less than $50 can claim their winnings in the store where the card was purchased. Otherwise, winnings must be claimed from the D.C. Lottery Board.

Each game will probably run for eight to 10 weeks, according to Games Production Inc.'s vice president and executive administrator, Robert S. Bain. For the first game, 10 million tickets have been printed.

Bain said that out of the $10 million the board hopes to collect from the first game, not less than 45 percent will go to winners and not less than 30 percent will go to the D.C. government's general fund. The rest will go for expenses.

Lottery tickets cannot be sold in what has been labled "the federal enclave" surrounding the Capitol, the Mall and the White House, in Georgetown or in Metro stations.

The other principals of Games Production Inc., which won the lottery contract award in June, include president Joseph B. Suter, owner of Bloomingdale's liquor stores and community centers; vice president of field operations Walter I. Ray Jr., former marketing manager for Anheuser-Busch Inc., and secretary and treasurer Warren C. Williams, owner of W&W Liquors. Bain was formerly national advertising director for Black Enterprise magazine