Maryland's "Numbers Game" - a year old today - has hit pay dirt, outselling by far government-run lotteries in more populous states and rivaling the age-old success of numbers racketeers in the Washington and Baltimore areas.

Surpassing the most bullish forecasts, the daily lottery has generated more than $1 million a week in revenue for Maryland and handsomely rewarded the several hundred Maryland merchants licensed to act as the state's bookies.

Small liquor stores and food shops skirting the Washington-Maryland line, where lottery sales are their liveliest, have been transformed into overflowing betting parlors - if they are fortunate enough to be licensed to sell tickets in the first place - sometimes earning more from ticket sales than from the sale of store merchandise.

Throngs of housewives, businessmen and laborers carrying long lists of numbers fan out in snake-like lines during luncheon breaks and after working hours to bet on the nightly drawings.

Dream books and numbers sheets, once under-the-counter trappings of an illicit game, do a brisk business among superstitious lottery players looking for the right number to beat odds of up to 1,000-to-1.

Enterprising numbers writers in Washington and Baltimore, scrambling to hold onto their illegal trade, now take bets on the state number as well as the street number, according to police in those two cities, though police doubt that the lottery has had any real impact on the volume of illicit betting.

When they closed the books on the "Numbers Game" last night, Maryland lottery officials had recorded first year sales of $154 million, not far behind the $200 million that Washington police say is bet on illegal numbers in the District each year, recorded first year sales of $154 million, not far behind the $200 million that Washington police say is bet on illegal numbers in the District each year.

None of the other seven states with daily lotteries come close to Maryland's total and per capita ticket sales. Second-ranking New Jersey placed just a third of Maryland's average of 84 cents bet per resident this year, statistics show.

More than a third of the "Numbers Game" gross this year - or $59 million - wound up in the state treasury. Though a fraction of Maryland's $4 billion budget, it is nonetheless equal to the revenue that could be raised by increasing the state sales tax by one-half cent.

Another $76 million was paid out in prizes, the winners receiving payoffs ranging from 50-to-1 to 500-to-1 per bet. Players can bet from 50 cents to $5 on each three-digit, yellow and black lottery ticket.

When they unveiled the computerized "Numbers Game" 12 months ago, lottery officials declared open war on the numbers racket and promised to divert its illegal sales into the state's general fund.

With its copyrighted slogan - "It's OK To Play" - and its obvious similarities to the illegal game. Maryland's daily lottery was promoted as a safe alternative at slightly lower odds.

"We wanted people to know they didn't have to be worried about the police and about getting cheated," explained Louis Rosenbush, whose Pikesville advertising agency handled promotions for the state.

On the eve of the game's first birthday, lottery chairman George P. Mahoney said that "there's no doubt in this world that the illegal game has suffered tremendously."

"From what I've learned by talking to people that were in this racket, we have cut in tremendously to the extent of 75 per cent," he said.

Baltimore and Washington area police disagree. They say that Maryland's new game has had little or no impact on illegal traffic and will never replace the convenience and credit offered by racketeers.

They acknowledge that the legal game has reached illegal business levels, however, but maintain that Maryland's lottery is merely augmenting - and not replacing - the street trade.

If the "Numbers Game" is attracting new bettors, they come from the traditional strongholds of the illegal game: the low income black and white pockets of Baltimore and the inner Washington suburbs.

Seventeen of Maryland's top 20 lottery outlets, which account for about 7 per cent of the state's total weekly sales, lie within a short distance of the Washington line.

Three Mount Rainier outlets within yards of each other in the 3300 block Rhodes Island Avenue sell more tickets each week than six of Maryland's smallest counties combined.

Interviews with numerous lottery agents and bettors along the District boundary indicate that as much as 80 per cent of the business comes from Washington residents who cross over to place bets on the Maryland game.

It is the game's dramatic success in low income white and black communities that has prompted the strongest criticism of the concept. Poverty workers and some state legislators say that tapping lottery money from those sectors results in "reverse welfare" and "regressive taxation."

"It's very depressing that the same people we see with food stamps are standing in line to buy lottery tickets," said State Sen. Julian L. Lapides (D-Baltimore City), a longtime critic of the lottery. "I find it shabby and depressing that the state is in this business."

Lottery director Stanley S. Fine says in defense that the state is merely siphoning off funds that would otherwise find their way into illegal traffic. "We're talking about people who've played illegally before," he said. "We're directing them into legal channels where they get a fair shake and the state gets a share."

From its first week in business, when just over $1 million was bet, the "Numbers Game" has steadily grown in popularity, hitting its peak of $4 million in June and hovering close to that figure ever since.

As the game zoomed beyond the most optimistic expectations, store-owners started realizing the benefits of the 5 per cent sales commission and the continuous traffic of consumers seeking lottery tickets.

Lottery officials were soon deluged with pleas to expand the number of shiny, computerized lottery terminals beyond the original 300 outlets. Dozens of applications streamed in each day. State legislators and county councilmen developed a new constituent service of recommending merchants for lottery machines.

Seeing a ready market, storeowners with lottery terminals have exploited the gambling phenomenon by stocking their shelves with betting tips enclosed in colorful envelopes and paperback books associating three-digit numbers with the subject of dreams. Liquor stores in Baltimore have offered free lottery tickets for each case of beer purchased and "lucky loser" drawings in which prizes are given to holders of certain losing lottery slips.

For the state's top lottery outlets, the "Numbers Game" produces weekly commissions of $1,000. In return for this reward, lottery agents need only operate the terminals, pay off winning bets and put down a $50 bounding fee assuring the state that it will receive the proceeds.

The game's consistent drawing of large crowds dramatically boosts floor traffic for merchants with a lottery machine and assures a regular clientele for their merchandise. Some lottery agents say they have experienced as much as a 20 per cent increase in business since they began selling "Numbers Game" tickets.

"A certain percentage of people who play the numbers will see things here and say later they need to come back and buy them," said Bob Haislip, owner of a Mount Rainier trading shop.

"We've had people win $500 and turn around and buy a television set for a couple of hundred dollars," he said.

Haislip said his average weekly lottery sales of about $13,000 are often double his volume of merchandise sales. His lottery commissions frequently exceed the profits he clears from his trading business, he added.

For businessmen unable to land their own lottery terminals, the "Numbers Game" is a sore subject. It is especially troublesome for Washington merchants forced to compete with stores just over the Maryland line that have popular daily lottery tickets for sale.

Chuck Parker, part owner of a liquor store on the Washington side of Eastern Avenue, figures that a competing spirits shop located one block north in Maryland siphons off at least 5 per cent of his business just because it sells daily lottery tickets.

"If you want a six-pack of beer," he said, "even if my beer is 10 cent cheaper, why is a guy going to buy lottery ticket and get in his car and come here when he can get both [WORD ILLEGIBLE] the same place?