The city's first instant-win lottery tickets will go on sale Aug. 25, the D.C. Lottery and Charitable Games Control Board announced yesterday. The first of about 700 licenses to sell the tickets was issued early this week.

The odds on winning in this first game will be 1 in 9, and 10 million tickets will be sold at $1 each for this initial lottery, according to lottery board executive director Douglass Gordon.

Prizes will be grouped in two general categories--"low tier" awards ranging up to $50 and "high tier" prizes of as much as $25,000.

Gordon said that after all tickets for the first game have been sold, there will be a drawing to choose a $1 million grand prize winner from among the 2,000 high tier winners. The board will not issue tickets for a second game until after the initial 10 million-ticket first game is over.

More than 500 District retailers--including liquor stores, grocery stores, newsstands and service stations--have been authorized to sell the $1 tickets, Gordon said. He added that he believes an additional 200 stores will have received authorization before the first game begins, and will be able to display the red, white and blue cherry blossom logotype that will tell customers where they can buy their instant chances to win.

Jack Thomas, a native Washingtonian and owner of Sarge's Liquor Post on 14th Street NW in Columbia Heights, was the first vendor to pick up his license on Monday.

To play the game, all a customer need do is rub off a plastic coating on a ticket and hope for matching symbols or numbers that designate a winner. Low-tier winners can collect prize money immediately in the establishment where they purchased a ticket.

Winners of $50 or more must have their tickets validated at the lottery board and will collect their prizes there. High-tier winners will have federal--but not local--taxes on their winnings deducted when they collect, Gordon said.

Gordon said that he expects all 10 million tickets to be sold by the end of September, and forecast that "the board could return not less than $3 million" to the city's coffers. In setting up the lottery, the board agreed that no less than 30 percent of each game would be returned to the city.

The board is considering creating a daily number lottery similar to the game now played in Maryland, but Gordon said he doesn't expect that to begin before next April.