Just in case there is any doubt after last week's report that City Council member Willie J. Hardy is somewhat of a regular - and occasional triple winner - at area horse racetracks, Hardy says for the record that she would vote for making gambling legal in the District of Columbia.

Actually, the usually street-wise Hardy said the other day, a lot of this gambling stuff is rather new to her. "I'm so naive," she said, "the first time I heard about people playing numbers illegally in Washington, D.C. was in 1975."

Since that time, Hardy (D-Ward 7) said, she has found out that some of the numbers winners have made rather traditional investments with their earnings. "That's how some people in my ward got the down payment for their homes," Hardy said. "They hit the number."

You're paging through a copy of The New Observer picture newspaper, a Washington weekly with a masthead announcing that it is "The Publication for the People." All of a sudden you are reading City News, the publication of Mayor Walter E. Washington, which is neatly tucked away inside The Observer.

Alas! Not only is the mayor's paper recently expanded beyond the city government to include more than 90,000 potential readers, one of the largest non-daily publications in the city. It's sliding in - literally - on the circulation of the regular weeklies as well.

J. Hugo Warren Jr., general manager and publisher of the 25,000-circulation Observer, said it's good for business. "When I get something that's really newsworthy to include in my paper. I include it," Warren said. He has no figures to prove it, but Warren claims his circulation has gone up since he began including City News in his own publication three months ago.

The Observer is not paid in any way to circulate the mayor's paper, Warren said. And he would gladly do the same for any of the other mayoral candidates. "I'm completely bi-partisan," he said.

The only person who claims to be worried about the arrangement - which Warren said is the result of a meeting between himself and someone whose name he cannot now recall - is Sam Eastman, the mayor's director of public information. Eastman's shop puts out the monthly chronicle of mayoral good deeds and said he was unaware of what The Observer was doing until a reporter told him.

"I would be pleased if he's helping us to distribute the paper," Eastman said. "But my question is would this lead to indicate to a reader that the city government is associated with or is endorsing whatever is in his newspaper?"

That may be hard to tell from the May 20 edition of the Observer, which carried no editorials. It did have a front page story, however, about the "World's Grandest Sportsman's Ball" to be held next month in Las Vegas in conjuction with the Ken Norton Larry Holmes heavyweight championship fight.

To his knowledge, Eastman said, the city government was not supporting that event, billed as a chance for "international jet-setters of the ring-side breed to 'strut their stuff' for recognition upon their peers and for expensive prizes."

"The mayor will not be there," Eastman said.

It happened a couple of weeks ago, just before a House-Senate conference committee finally agreed on a plan for initial financing of the $110-million downtown convention center.

Sen. Charles McC. Mathias (R-Md.) had just finished talking positively about the "ripple effect" the center would probably have in spurring economic development in the surrounding area when the mayor decided to add a little more to Mathias' argument.

"There are other rip-offs - ripples, rather," said the mayor, catching himself and touching off a little laughter in the room.

"That's what happens when the chairman (Vermont Democratic Sen. Patrick J. Leahy) calls meetings at 8 in the morning," Mathias said.

"Truth come through," said Leahy, who all along has doubted that the convention center would pay its own way.