Lottery to Rub ‘X’ Off Vendors List : Sales by Adult Businesses Tarnish Image, Officials Say

Officials of the infant California Lottery are taking steps to disqualify adult bookstores, topless nightclubs and nudist colonies as ticket vendors--without subjecting the state “to gangbusters of lawsuits.”

They fear that such establishments, which won the right to sell lottery tickets in a random computer-selection process as did other businesses, may tarnish the wholesome image lottery officials want to establish for the gambling games.

“They’d like to get the adult bookstores out,” one Southern California lottery administrator said Wednesday. “They think adult bookstores are not good for the lottery.”

Jim Braxton, who directs lottery operations in Orange, San Diego, Riverside and Imperial counties and coastal portions of Los Angeles County, said that in his territory there are 15 to 20 adult bookstores, one nudist colony and three bars featuring nude or topless dancers where lottery tickets are being sold.

So far, the effort to eliminate the adult businesses has been subtle.

Regional lottery officials met in August and decided to recommend to state lottery commissioners that the businesses be eliminated from selling tickets, Braxton said. The officials conducted “marketing evaluations” of all 21,000 lottery vendors in September and October to refine their recommendations that establishments such as adult bookstores and topless clubs be discontinued as vendors.

Before final decisions are made, however, lottery officials want to be sure that they can legally justify the move.

“You don’t want to leave yourself open to gangbusters of lawsuits,” said Roger Kluth, head of the lottery’s retail contracting unit.

Although the Deukmejian Administration exercised great caution in implementing the lottery, vendors were selected by computers that considered only how much customer traffic a business had, the number of transactions and business hours, Kluth said. The lottery sent employees out to inspect potential sales outlets but did not complete all the inspections before sales got under way.

“We knew we were going to get some junk in there,” Kluth said.

Lottery spokesman Bob Taylor said the five-member Lottery Commission will consider a statewide policy to ban the adult-oriented ticket outlets at its Dec. 18 meeting.

“There is some concern about . . . how you go about this from a legal standpoint,” Taylor said. “There is a feeling here that the market will give us a justification.”

Taylor said lottery officials do not know how many adult businesses throughout the state sell lottery tickets.

Taylor said lists are being compiled of outlets that regional officials believe should not be allowed to sell tickets, based on marketing research. But he said those lists will also include outlets that may be eliminated because of oversaturation of vendors in a given area.

Braxton said no adult businesses have been recommended to continue as vendors. He said such enterprises “are not considered conducive to the lottery environment.”

Tom Wimbish, manager of F-Street Corporation, which sells lottery tickets at its chain of X-rated bookstores in San Diego, said it is “ridiculous to assume that selling lottery tickets here hurts the lottery’s image.”

But Wimbish, who had not heard that lottery officials wanted to eliminate ticket sales at such businesses, said he is not certain that he will fight to continue them. “At best, we are breaking even on the sales,” he said.

Patrick Moorhead, owner of the Chee Chee Club, a Santa Ana bar featuring scantily clad dancers, said lottery ticket sales have been brisk.

“Gambling has always been offered primarily to adults, so I think any bar or adult bookstore is probably the most likely place to sell them (lottery tickets),” Moorhead said.

Since contracts to sell lottery tickets are “provisional,” Moorhead said, state officials will probably be able to eliminate businesses that they consider undesirable.

“But I will probably be inclined to discuss it with them further,” he said.

A nudist ranch owner objected to being placed in the same classification as adult businesses.

“I can understand that they wouldn’t want to have adult bookstores or topless clubs selling them,” said Ralph Kilborn, owner of Olive Dell Nudist Ranch in Colton. “But I don’t understand why it would affect a nudist resort.”