Race Track’s Lottery Bid Hits a Snag

California’s lottery director will seek legal opinion to determine whether Hollywood Park race track should be granted a license to sell lottery tickets in light of disclosures that Lottery Commission Chairman Howard E. Varner owns $42,000 worth of stock in the Inglewood facility, it was learned Friday.

“We actually don’t know whether (the track’s application to sell lottery tickets) will be granted at this time,” lottery Director M. Mark Michalko said through a spokesman. “We will assess the situation.”

Hollywood Park filed its ticket-vendor application last month with the state lottery office. With an annual attendance of 3 million people, each presumably predisposed to gambling, the track has the potential of being a big moneymaker for the soon-to-be launched lottery.

According to lottery spokesman William Seaton, Michalko is not “ruling out” acceptance of Hollywood Park’s bid but will let attorneys for the lottery determine if Varner’s stock ownership in a major lottery outlet poses a conflict of interest.

“Based on what I know right now, I don’t see it as a conflict,” Michalko’s statement said.

1,757 Shares of Stock

Financial disclosure statements on file with the Fair Political Practices Commission show that Varner owns 1,757 shares of stock in the park’s operating company, valued at $24 per share. Varner said he will sell the stock if it is determined that a conflict exists.

Varner, appointed in January to the commission by Gov. George Deukmejian, faces a Senate confirmation hearing in August.

The governor’s office was unable to determine late Friday if Varner’s Hollywood Park interests were made known to Deukmejian during the extensive background checks the governor required of all lottery commissioners. Deukmejian spokesman Kevin Brett said, however, that Varner “enjoys the full confidence of the governor.”

Don Robbins, a lawyer for Hollywood Park, said Friday he was surprised to learn of Varner’s holdings.

“I didn’t know until this moment he owned any Hollywood Park stock,” said Robbins, who helped prepare the track’s vendor license application.

‘Don’t See Any Conflict’

Robbins said that since Michalko, not the Lottery Commission, has the final say on vendor licenses, “I personally don’t see any conflict of interest.”

Robbins said one “easy way” for Varner to keep his stock and the park to get a license “is for him just not to vote on anything to do with Hollywood Park.”

Hollywood Park contributed more than $700,000 last year to a campaign funded by the racing industry to stop the lottery, a competing form of gambling. In April, Hollywood Park officials did an about-face and embraced the lottery, calling for the sale of lottery tickets at race tracks across California.

Lottery officials now are processing thousands of vendor applications and are scheduled to begin awarding licenses by Aug. 1.