Washington residents bet more than $30 million in the Maryland lottery last year, and some of the biggest beneficiaries of that wagering were the Maryland state treasury and a number of Maryland liquor and food dealers just across the D.C. line.
Now, however, the financially strapped District is eyeing daily numbers and lottery games of its own, with a lure of bigger payoffs to winners than in Maryland and ticket outlets that would be convenient for city residents and possibly attract bettors from Virginia as well.
As a result, the $130 million bonanza Maryland's treasury reaped last year from lottery sales could be pared by as much as $30 million, and thousands of dollars trimmed from the commissions paid to Prince George's and Montgomery County shopkeepers to sell the lottery tickets, if the D.C. gambling referendum is approved two weeks from today.
Proponents of legalized gambling in the District are predicting that as much as $100 million might be bet in the first year of a D.C. lottery, and base that estimate on current Maryland lottery players like auto mechanic Clarence Johnson.
Once a week, Johnson, 47, drives 10 minutes from his D.C. home to a nearby Maryland suburb and buys $12 worth of Maryland lottery tickets.
Johnson says Maryland will lose him as a lottery customer if the District starts its own game even though he recently won $800 when his pet number 828 came up a winner in the Maryland game. "No reason to drive, when it's right across the street," Johnson reasoned the other day.
Martin M. Puncke, director of the Maryland lottery, estimates that less than 10 percent ($33.3 million) of Maryland's gross lottery wagering would be lost to a legal numbers game in the District.
But Robert D. Rader, chief of the state's Bureau of Revenue Estimates, said the state might lose $66.7 million -- half of the amount wagered in Prince George's and Montgomery. Those two counties account for 40 percent of the state betting total and contain 85 of the top 100 lottery sales outlets in the state.
Maryland officials and the shopkeepers, who often sell liquor and food to lottery players, have become fatalistic.
"We feel if it comes, it comes," one Maryland liquor dealer said. "There isn't really anything we can do to stop it."
A city-run daily numbers game is one of five major proposals on the all-or-nothing referendum, which, if approved, would also legalize parimutuel betting on jai alai and dog racing, and bingo games and social gambling, such as poker.
Gambling opponents have aimed little of their ammunition at the legalized lottery section of the referendum, in part because so many people already play the illegal numbers games in D.C. and the legal one in Maryland.
In addition, a poll of 1,000 city residents commissioned by the antigambling organizations two months ago showed that a majority favors legalization of a numbers game, but not jai alai.
Philosophically, the opponents, many of them black Baptist ministers, are still against lotteries. "There are drunks on my block, but I don't want them in my house," said the Rev. Andrew Fowler, pastor of Capital View Baptist Church in Northeast Washington. "Why would we be interested in having more criminals (gamblers) in the District?"
Tactically, however, the opponents have focused their attention on the allegations of game-fixing involving jai alai, a fast-paced Spanish court game, as the best way to defeat the referendum.If legal gambling comes to the city, the opponents contend, the number of broken homes, crimes against people and persons on welfare will increase.
A major impetus for approval of the referendum is the financial state of the city government -- which currently has a $172.4 million potential budget deficit and is expected to face even larger revenue gaps in the future.
Lotteries, especially a daily numbers game, are likely to yield more money than any of the other types of wagering proposed in the May 6 referendum -- seven times more than the municipal take from jai alai and 15 times as much as parimutuel betting on dog races.
Gambling proponents estimate that after prizes are awarded and administrative expenses paid, a lottery might raise $30 million annually for the D.C. government, special education programs and service-oriented private, nonprofit organizations -- the three categories designated by the referendum to receive gambling profits.
Lotteries have become a way of life in 14 northeastern states, where $2.1 billion was bet last year -- only $300 million less than the annual budget for the State Department. Maryland's seven-year-old lottery is considered one of the best.
Nearly $333 million was wagered last year in the Maryland lottery, and possibly as much as 20 percent of that was bet by Washington residents, according to the Maryland Board of Revenue estimates. From that figure, an all-time high of $130.1 million went to the state treasury, and $165.6 million was paid out in prizes.
If D.C. voters approve the referendum, the city would likely run a numbers game similar to the one in Maryland, where players pay 50 cents or more to buy tickets with three-digit numbers on them. But the District game would pay winners at odds of 600 to 1 rather than the 500 to 1 odds paid by Maryland.
The practical effect of such a pay-out difference, assuming there are fixed prizes for specific amounts wagered, is that a winner with a 50-cent ticket would be paid $300 in the District, compared to $250 in Maryland. The 600 to 1 payoff is larger than in any other municipally run American lottery and similar to that used by many of the city's illegal numbers writers. l
However, the new five-member D.C. Gambling Control Board that would be established by the referendum to regulate gambling could also decide to make the payoffs to winners from a parimutuel pool.
A total of 60 percent of the amount wagered would still be paid on winning tickets. But the winning amounts on a specific-priced ticket would vary from day to day, depending on whether a large or small group of people had bet on the winning three-digit number.
The gambling board would also set the exact price of the lottery tickets and the amounts of the prizes, including any possible $1 million payoff.
The daily numbers would undoubtedly be the cornerstone of the District's lottery operation. However, Brant Coopersmith, who heads the umbrella group promoting gambling in the city, said that other lottery games -- such as a weekly drawing or special lotteries designed to attract tourists -- could also be launched.
Coopersmith estimates that $100 millin might be wagered in the first year of a city lottery, with $60 million being awarded in prizes and $10 million going for administrative expenses, leaving a $30 million profit.
Coopersmith estimates that as much as $75 million annually is wagered on Maryland games by D.C. residents who would switch those by D.C. residents who would switch those bets to the District A D.C. game might attract another $25 million from new D.C. players and from Maryland and Virginia residents, he said.
One Maryland lottery official said that the District's "real ace is what it can get from Virginia (residents). We're inconvenient to Virginia (residents). But they probably work in the District."
The Maryland lottery has become an important fact of life for players and tickets sellers alike. Mayland businesses have often jousted for the privilege of having one of the computerized ticket-writing machines. Some shopkeepers say that the lure of the lottery has resulted in a 20 percent increase in sales of their other merchandise.
Along the city's border, Maryland stores with the machines have often had higher sales than District stores a block away, solely because of the lottery attraction. At certain times long lines of ticket buyers can be seen in numerous Maryland stores, while only a few people might be spotted in D.C. stores selling the same brands of liquor and convenience foods at similar prices.
Shop-Rite Liquors in Takoma Park, a block across the District line on the Maryland side, spent $15,000 to decorate its lottery outlet with specially made black-and-yellow wallpaper with the insignia of the Maryland lottery games, and to install black-and-yellow striped floor tiles.
Shop-Rite sells more Maryland lottery tickets than any of the state's other 850 outlets, about $25,000 worth each week, a volume that gives the store $1,250 a week in sales commissions. Store manager John McGraw estimates that 70 percent of the players at the store are D.C. residents.
Because the lottery is such an attraction, D.C. liquor dealers , who want lottery outlets in their stores, are among the biggest contributors to the campaign to legalize gambling, donating $5,000 of the $50,000 that pro-gambling forces have raised.
Four companies who manufacture lottery equipment and tickets -- and who would like to land the contract to operate a lottery here -- have contributed even more, $19,000.
Despite the vast sums of money that have been raised by state lotteries, not everyone is enthralled by them.
The chief criticism of lotteries is that they are among the most regressive forms of gambling, that people with relatively little income spend proportionately more on them than people in higher-income categories.
A 1974 study by the Commission on the Review of the National Policy Toward Gambling showed that 60 percent of those with a $15,000-$20,000 annual family income bought lottery tickets that year, the highest percentage for any income category. But bettors with that income were likely to wager only $19 a year on lotteries, compared to $24 a year for those with less than a $5,000 income.
In effect, lottery critics argue that the games amount to extra taxes on the poor.
The gambling commission concluded, "The distinction between 'proftis' (from lotteries) and 'taxes' appears to be academic; lotteries are relied upon by the states to generate revenues that would otherwise have to be produced by taxation, and the revenue they contribute to the states is indistinguishable from the monies raised by taxes."
"The very poor do not play any of the games on any substantial basis and the very rich don't play either," countered Duane Burke, director of the Rockville-based Public Gaming Research Institute.
"How can you call something that's voluntary, taxation?" he asks. "A tax is a nonvoluntary method of extracting money from individuals."
While most lotteries in recent years have been problem-free, mismanagement plagued New York's game in 1975 when duplicate and triplicate tickets were printed for the same drawing. Delaware had a different problem the same year when the winning lottery number, based on the post position of the winning horse in six races, wasn't even sold.
In Connecticut, a grand jury is currently investigating allegation that its lottery has been rigged. One lottery warehouse employe has already pleaded guilty to fixing a lottery drawing and another case is pending.
Whatever the shortcomings of lotteries, the fans are legion. Witness the scene at Shop-Rite Liquors on St. Patrick's Day: The computer that writes lottery tickets went kaput. But the lottery players were not deterred. w
They waited in line four hours while the machine was fixed.