Lotto Games to Be Delayed for Several More Weeks

California lottery officials will delay launching the multimillion-dollar lotto games--already a month behind schedule--for several more weeks to make certain that the kickoff will be a smooth one.

Designed to augment sagging sales in the lottery’s scratch-off “instant games,” the computerized numbers games, with anticipated jackpots of $50 million or more, are expected to lure hundreds of thousands of additional Californians into gambling. Officials had hoped to have the computerized network in place by Friday, when the lottery will celebrate its first anniversary.

But setting up the mammoth system, with its 5,000 countertop terminals linked by hundreds of miles of telephone lines to a pair of central computers in Sacramento and Whittier, apparently has proved to be more complicated than anticipated.

“I don’t think there is a problem,” lottery director Mark Michalko insisted. “The caution that we are exercising is something that we are doing of our own volition. This is just a more detailed review than any other lottery has undergone.”

Since the instant games began a year ago, daily ticket sales have slumped by two-thirds. Moreover, problems with delinquent accounts from ticket retailers and missing tickets have led to allegations of sloppy bookkeeping practices by some state officials.

Although the state controller’s office has kept close tabs on the lottery’s instant game accounting practices, both Michalko and controller’s representatives say the monitoring has had little effect on the timing of the lotto start-up.

In fact, most of the problems with the instant games have been corrected, said Thomas D. Colby, the controller’s lottery program manager.

“They are pretesting the system before it goes live, basically getting the bugs out,” Colby said of the lotto preparations. “There always are (things to modify) with any computerized system. . . . If you need to change things, you do it during the test period and before the games start. You don’t want to have to do it the day after.

“Whether that’s cautious or good business, take your pick.”

But the delays are proving to be costly.

Officials with GTECH Corp., the Rhode Island firm that won the $121-million contract to supply the computer network, complain that the wait is costing them up to $50,000 a day.

Like other smaller supplemental contractors involved in setting up the system, GTECH has had its equipment in place for weeks and its workers are impatiently awaiting the go-ahead.

“We have a team of a little under 300 employees standing by waiting to go and they eat every day,” lamented Robert K. Stern, GTECH’s board chairman. “From our standpoint, (lottery officials) are exercising exceeding caution and I hope they’re coming to the end of the trail.

“It’s well beyond and above anything any other state has ever done. It’s their judgment call . . . but believe me, we’re ready. We’re comfortable we can go and we have been, increasingly so, for the past two or three weeks.”

Eager to Begin

Representatives of the four telecommunications companies involved in stringing the computer-to-computer linkages say that they, too, are eager to begin. In some areas, the telecommunications lines have been in place since February.

“We’ve been up and ready and anxious to begin,” said MCI spokesman Bill Stern. “All we need to do is turn the switch.”

“It’s a very complicated, sophisticated network, but it went together ahead of schedule and is working fine,” added General Telephone Co. spokesman Tom Lewick. “We’re ready to have this thing kick off.”

Michalko, however, says he is reluctant to announce a firm starting date until the data from all the testing is analyzed--by lottery officials and by independent teams of consultants hired by the lottery, the state and by GTECH.

But he said lotto will absolutely begin before the end of October.

Comparisons Made

“When we first estimated the date, we were looking into an approximate time frame based on the history of other states,” Michalko said. “The magnitude and complexity of California . . . is what is causing us to go into October.”

Even when it finally does get under way, lotto is not expected to immediately draw the same huge rush of business that the instant games did in their first weeks. Michalko and others acknowledge that the computerized games are more complicated than simply scratching off latex and will take some time to catch on.

To play the game, officially known as Lotto 6/49, participants will buy $1 play slips from a retailer, then pick six numbers from a field of 1 to 49. The picks will be entered into the computer system, which will then issue a receipt, or ticket, recording the selections.

Winning numbers will be announced each Saturday night, with the top prize--40% of half of the tickets sold that week--split between those who have picked all six numbers. If no one chooses all six, the unclaimed pot will be dumped into the following week’s. As a result, top prizes could quickly climb into the tens of millions of dollars.

Record Jackpots Possible

And if ticket sales from the instant games are any indication, participation should be high enough to produce some record jackpots, lottery officials predict.

In its first year, $2.059 billion in instant tickets were sold, a figure that more than doubled the initial projections and put the lottery second only to Sears on a list of the nation’s most profitable retailers.

“If we can do as well,” said GTECH’s Stern, “then all our pains will have been assuaged. We can hope for those kinds of results, but only pressing the button will tell us.”