Its education budget exhausted, this Los Angeles suburb had announced a severe cutback at its popular, academically oriented high school when salvation came at the last minute from an unexpected source -- a Georgia company that sells colorful tickets with special aluminum coating.
The savior was Scientific Games Inc., a firm instrumental in establishing California's state lottery. With school districts now beginning to calculate what the lottery's ballot victory last November will mean to them, the company's successful $2.1 million campaign here has increased significantly the likelihood that the official gambling business will spread quickly through the rest of the country.
With nearly 26 million people and a firm hold on national media attention, California will enter the lottery business with tremendous impact, New York State lottery director John Quinn said. "It's going to magnify your successes and magnify your failures," he said, particularly as the 29 states without lotteries consider whether to create them.
With federal aid to states under constant threat and voters resisting tax increases, state officials in recent years have been drawn to the lottery idea like race track devotees to a $2 window.
Chip Graves, associate general counsel for Scientific Games, said his company conservatively estimates an average of $60 in gross lottery revenue for every resident of a state. Some do much better: the Maryland per capita average is about $127 and the District's about $137. But even Graves' low estimate would mean more than $1.5 billion in annual revenue to California.
Working through Californians for Better Education, Scientific Games last year funded an expensive political campaign -- opposed by equally free-spending race tracks with church and law enforcers' support -- to put the lottery initiative on the California ballot and have it passed. The ballot measure earmarked at least 34 percent of the revenues for public education, with 50 percent to go to winners and no more than 16 percent for administrative costs.
That 16 percent could include 5 percent commissions for those handling lottery-ticket concessions, a substantial financial prize that has focused much interest on the state government's organization of the new lottery system, now far behind schedule. One state assemblyman has accused Gov. George Deukmejian (R) of dragging his feet and delaying needed revenues by insisting on extensive background checks of the commissioners and director.
In other states, lottery workers are measuring the benefits of a move west.
"There is a very tiny pool of people with experience in lotteries," said Lea Adams, public relations and information director for the D.C. Lottery and Charitable Games Control Board. "A lot of them in some jurisdictions would be eager to go to California."
Deukmejian's five appointed lottery commissioners -- a former restaurant company president, a retired accountant, a former school superintendent, a former district attorney and a former city manager -- have been interviewing prospective executive directors and visiting operations in other states.
Quinn, a former president of the North American Association of State Lotteries, brought the New York lottery back from scandal and temporary suspension when he took over in 1976. He recommends that new lotteries pay careful attention to public relations, clearly explaining their goals, and start with an instant payoff game before moving to the more lucrative but complicated weekly numbers contests.
Organized crime influence, he said, "is the least likely pitfall" any new lottery will encounter, but lotteries must spend time and money on security systems to thwart those who want to beat the game illegally.
With revenues estimated at over $40 million a year, the company sees the California victory leading the way to other rich states, like Florida and Texas, that lack lotteries.
Instant games, in which a $1 ticket buyer scrapes off the aluminum coating to find payoffs as high as $75,000, are Scientific Games' specialty. The company says it foresees an immediate boost in earnings if California's commission accepts its instant game plan, as nearly every new lottery in the country has for the past several years. "We think it's going to be a terrific market," Graves said.