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Lottery Officials Move to Prevent Sale of Tickets by X-Rated Vendors

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Times Staff Writer

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

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

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

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

Regional lottery officials, who in September and October conducted “marketing evaluations” of all 21,000 lottery vendors in the state, have recommended against establishments like adult bookstores and topless clubs continuing as vendors.

Before final decisions are reached, lottery officials want to make certain they can legally justify the move.

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

Customer Traffic Considered

Even though 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 the business hours. The lottery sent employees 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 on the issue Dec. 18. He said lottery administrators are preparing a recommendation on the issue.

“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.”

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Taylor said lottery officials do not know how many adult bookstores 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 the lists will also include outlets that may be eliminated because of over-saturation of vendors in a given area.

Jim Braxton, who directs lottery operations in the region that includes Orange, San Diego, Riverside and Imperial counties and coastal portions of Los Angeles County, said that in his region, there are 15 to 20 adult bookstores, one nudist resort and three cocktail bars featuring nude or partially nude dancers where lottery tickets have been sold.

Braxton said none has been recommended to continue as a vendor. He said such enterprises “are not considered conducive to the lottery environment.”

A nudist resort 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.”

Kilborn said he was initially turned down when he applied for a ticket sales approval, but is hopeful that lottery officials, who inspected his facility in October, would approve sales in the future.

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An owner of a Santa Ana bar suggested it was a logical place to sell lottery tickets. “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),” said Patrick Moorehead, owner of the Chee Chee Club.

Tom Wimbish, manager of F-Street Corp., which sells lottery tickets at a 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 said he had not heard that state officials wanted to eliminate such businesses, said he is not certain he will fight to continue sales. “At best, we are breaking even on the sales,” he said.

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