Governor’s Names for Lottery Panel Likely This Week

Gov. George Deukmejian is expected to make his first appointments to the state Lottery Commission this week, perhaps as early as today, Administration officials said Monday.

It is nearly eight weeks since the deadline imposed by Proposition 37, the lottery initiative approved by voters in November.

The initiative provided no penalty for missing the deadlines, and Deukmejian has blamed the delay on the need to complete thorough background checks on the five individuals he has picked for the commission.

Meanwhile, the Senate Governmental Organization Committee, a key panel for lottery-related legislation, has scheduled its first hearing for today on one of several bills that propose to amend the initiative.

In an effort to ensure competitive bidding, the bill to be discussed today would ease disclosure requirements for publicly held companies that want a share of the state’s lottery business. It is authored by Sen. Ralph C. Dills (D-Gardena), the committee chairman.

Under Proposition 37, the corporate officers, directors and major stockholders of a company and its subsidiaries would have to submit three years of income tax returns before their firms could qualify to bid on a lottery supply contract.

A similar requirement in Oregon, which also enacted a lottery initiative last November, discouraged competition for the state’s first lottery contracts, which were awarded last week. Seven suppliers made formal presentations to Oregon’s newly formed lottery commission and six pulled out after their top officials refused to meet the tax disclosure requirements, T. L. Fuller, the Oregon lottery information officer, said.

The remaining company, which won contracts worth $5.9 million for ticket supplies and consulting services, was Scientific Games Inc., a Georgia-based firm that heavily financed the lottery initiative campaigns in both Oregon and California.

Scientific Games and its parent company, Bally Manufacturing Corp., have both been required to make extensive disclosures in New Jersey, where Bally operates an Atlantic City casino.

During the Proposition 37 campaign, lottery opponents charged that Scientific Games had drafted the initiative’s disclosure rules to eliminate competition.

In Oregon, the required tax returns from the 37 companies and 87 individuals associated with Scientific Games were put into two stacks, each four feet high. It took 2 1/2 weeks to review the filings, Fuller said. Robert W. Smith, the state’s lottery director, has already asked the Oregon Legislature to eliminate the tax disclosure requirement.

In its current form, Dills’ bill would drop the disclosure requirement in California but would allow the lottery commissioners to seek the information in individual cases if they believe it is needed.

The legislation also would require the lottery commission to follow standard procedures for adopting rules and making most purchases, make it a misdemeanor to sell lottery tickets to minors and give the Legislature the power to review the commission’s expenditures.

The lottery has been a popular issue among legislators. At least 13 bills to amend Proposition 37 have been introduced since the legislative session began in December. Those bills have already attracted the attention of lobbyists hired by companies that would like a share of the state’s lottery business.

Deukmejian Administration officials say that it is unlikely that the first ticket sales will begin by March 21, the start-up date specified by the initiative.