The General Services Administration has forced Loeb's, a popular neighborhood deli for the downtown lunch crowd, to stop selling the more than 3,200 side orders of D.C. Instant Lottery tickets it has been dispensing each week.
The problem, GSA officials say, is that Loeb's, located at 15th and I streets NW, rents space in the federally owned Lafayette Building, in which gambling is prohibited. Moreover, the building abuts Lafayette Square at a corner a diagonal block away from Loeb's and, under the federal laws laid down when the D.C. lottery was approved, no lottery tickets can be sold in the federal enclave or adjacent to it.
The restaurant's owners contend the restrictions should not apply to them because they are so far from the park, and that they are not actually part of the federal building because they only rent commercial space there.
But last week, after GSA threatened to terminate the restaurant's lease, Loeb's husband-and-wife co-owners, Walter and Sigrid Loeb, reluctantly agreed to stop selling the $1 tickets until the dispute can be resolved in a lawsuit.
As it turned out, one of their customers won the top instant prize of $20,000 on the last day the tickets were sold.
Now the Loebs, who according to D.C. Lottery records sold an average of 3,234 tickets a week over the last 10 weeks of 1982, have posted signs saying, "No lottery tickets today. Sorry!"
Sigrid Loeb said the lottery's popularity "gave us a boost which everyone in small business can use these days."
GSA contracting officer Kenneth L. Perrin wrote the Loebs' lawyer last week, saying that the Loebs' "failure to comply with this decision may result in termination of the lease." Perrin could not be reached for comment yesterday.