Legislature to Assume More Control of Lottery : Gambling: New games have to win lawmakers’ and governor’s approval. The measure is passed in response to concerns about Keno’s impact.

Legislative discontent over the California Lottery’s introduction of Keno has led to the passage of a law limiting the power and independence of the appointed officials who operate the state’s games of chance.

The law, which was signed by Gov. Pete Wilson on Aug. 27--even though it curbs the authority of his own appointees--requires the lottery to obtain legislative permission before it offers new games.

Until now, the agency only needed a majority vote of the State Lottery Commission, a five-member panel appointed by the governor, to introduce new games such as Keno.

Under the new law, any time the lottery wants to introduce a game, a bill must be submitted to the Legislature, which will then conduct committee hearings. If approved by the Legislature, the measure would then require the governor’s signature.

Passage of the law marks the first time since the creation of the lottery in 1984 that the Legislature has voted to give itself a direct role in the operation of the government-run gambling agency.

The author of the measure, Sen. Tim Leslie (R-Carnelian Bay), said its bipartisan approval by a wide margin in both houses demonstrates a recognition by lawmakers that new technology has changed the lottery.

With technological advances allowing video gambling and interactive television, Leslie said the lottery could make decisions never envisioned when it was set up. Interactive television would allow players to choose numbers and register wagers using their television sets. Without leaving their living room armchairs, players could take part in games such as Lotto, Keno and Fantasy 5.

Leslie said the lottery’s quick approval of Keno, a fast-play game that brought a new style of gambling to California, prompted lawmakers to question whether an independent agency run by appointed officials should be making “decisions with major social implications.”

“They just kind of did it (Keno) in the middle of the night and just foisted it upon people and there were a lot of different issues that were never examined,” Leslie said. “So I got to thinking: ‘OK, now what’s the next technology? What’s going to come next that no one will know about and one day it will just be there?’

“The idea of interactive television came to mind. . . . Will the lottery take Keno and other lottery games into the home? And will an independent commission that has accountability to no one get to make that decision and no elected official will be able to discuss the implications of that for our state, our society or other gambling activities?”

Lobbying against the measure were Lottery Director Sharon Sharp, education organizations and several businesses that have major contracts with the agency, including telephone companies and GTECH Corp., the Rhode Island-based corporation that operates the lottery’s computer games. The biggest share of lottery profits goes to California schools.

Joanne McNabb, lottery spokeswoman, said Sharp and other officials were worried that the wording of Leslie’s measure was so unclear that it could require legislative action every time the lottery made any technological changes, whether or not they involved the introduction of a new game.

She said Leslie’s concerns about video lottery games and interactive television were unfounded because Sharp never had any intention of introducing them in California. “Not only are we not interested in that but our legal advice internally is that they may not be permitted anyway,” McNabb said.

In a memo to lawmakers, Pacific Telesis officials complained that the measure would “involve the Legislature in the unnecessary micro-management of this enterprise and cast California as an anti-technology state.”

Despite the opposition and the lottery’s request for a veto, Wilson decided to sign Leslie’s measure, indicating that he too was concerned about the need for more “public scrutiny of state-sanctioned games.”

“When Californians approved the Lottery Act in 1984, there was no way of anticipating the new games and the innovative ways of accessing these games made possible by technological advances,” Wilson said. “My greatest concern is that by making the lottery more accessible for adults, we run the risk of making the games available to children.”

Leslie said Wilson’s decision to sign the measure was preceded by a long debate in the governor’s office that pitted lottery officials against those concerned about the expansion of gambling in California. “I want to give the governor credit because it’s not easy to stand up against your own lottery director and say: ‘No, I don’t agree with you,’ ” Leslie said.

The bill was approved 27 to 10 by the Senate in June and 57 to 12 by the Assembly on Aug. 19. Leslie said the measure benefited from an odd coalition in the Legislature that included opponents of expanded gambling and supporters of private-sector gambling, such as horse racing, who feared that the lottery was creating unfair competition.

He said many lawmakers believed that, in approving Keno, the lottery had not adequately discussed the social impact of a game that provides drawings every five minutes and is available at many convenience stores.

Nor, he said, had it addressed concerns of law enforcement organizations, which opposed the new game, believing it would encourage loitering at gas stations and convenience stores.