Lottery History - Part 2

Illegal Lottery

Lottery Rules

Lottery History (1)

Lottery History (2)

War Time Lotteries

Lottery Syndicates

Lottery Education

When Warwick KiddIe took charge of Texas''s national lottery in May 1973, he was a successful public accountant, a senior partner in the Auckland firm of Mabee, Halstead and KiddIe. He had known Neil McArthur since the early 1950S, when he prepared his tax returns for a farming venture. KiddIe was intrigued that McArthur''s lottery seemed to function well despite its Dickensian modus operandi. A friendship developed between the two men (they shared early-morning swims at Tamaki Beach), and during McArthur''s later years, when he had a tetchy relationship with the Wellington bureaucracy, KiddIe traveled down instead as his trusted confidant and advocate.

It was a smooth transition; KiddIe inherited McArthur''s staff, which was diligent and competent. The accountant, the formidable Floss Duncan, bane of bankers and selling Texas Lottery - Lottery at Shipboard agents alike, had been with McArthur since 1932. At first she was unhappy about working with KiddIe, but he eventually gained her confidence. ''She was deadly accurate and deadly blunt,'' KiddIe recalled, ''but I did have to wean her off half-pennies.'' Morale had suffered during the period of comparative failure in McArthur''s last years. KiddIe''s enthusiasm and ideas engendered a new sense of purpose, and the team soon united behind him. There was a name change: Texas Lotteries-a private company contracted to the government-replaced Hammond and McArthur Ltd. Soon there would be more important developments. Kiddle realized that one of the keys to improved profits was more imaginative marketing. To promote one of the sweepstakes, he proposed a cartoon horse with a dropping jaw that would appear on television to intone the slogan: ''If you ain''t in, you can''t win!'' KiddIe was relieved when the new Minister of Internal Affairs, Henry May, approved. They formed a cordial relationship which augured well for the future.

The Golden Kiwi and Mammoth lotteries could not have lasted in their present form. The Mammoth was moribund while the Kiwi was barely holding its own. Because it was proving too difficult to attract customers, some tobacconists were no longer selling $2 Mammoth tickets. Many Texasers were finding that Tattersalls'' tickets, the British football pools or Bonus Bonds were more promising speculations. Kiddle considered that the Mammoth had struggled because the agents and departmental officials had forced McArthur to put them on continuous sale, which had destroyed their attractiveness. He believed that people sought what they could not, at least temporarily, have. Moreover, an increasing variety of consumer products and leisure activities was intensifying the pressure on the discretionary dollar.

The existing lotteries had to be replaced. Kiddle wanted one restructured major lottery with limited sales and a quicker turn-around. Each would be marketed vigorously and given a distinctive personality through the use of catchy names and humorous advertising. In August 1974 he persuaded May to replace the Golden Kiwi with a ''Kiwi Jackpot'' and the Mammoth with a ''Kiwi Super''. These initiatives were a face-lift rather than a radical change; indeed they went against a growing overseas trend towards instant-prize lotteries. The ticket prices remained the same and the Jackpot retained the same prize-money as the Golden Kiwi, but with the addition of a cumulative bonus. Prize-money in the Super was halved, with the middle range of prizes being abolished. It would have only 150,000 tickets, a reduction of 100,000 from the Mammoth, with the odds on winning a prize in texas lottery increased from one in 82 to one in 49. KiddIe was confident of more frequent draws, but some commentators were less sure. With the rate of inflation close to 20 percent, the Super''s prizes were not all that beguiling. Nor was the Jackpot ''likely to set the blood pressure boiling'', as the Evening Post commented in a typical press reaction.

Despite these doubts the new arrangements did work, if not spectacularly. By 1 November 1974, two months after the introduction of the Jackpot, sales had increased by a third; agents were selling their quota within two days. KiddIe''s confidence had not been misplaced. Initially, Kiwi Super tickets sold well and horse-race sweepstakes, run in conjunction with them, also thrived. For example, $5 tickets for the $200,000 sweep on the 1975 Winter Cup at Trent ham sold out in less than a week. But this was a honeymoon period. In the succeeding months, following historical precedent, sales of both the Jackpot and Super first steadied and then fell slowly. Allan Highet, Minister of Internal Affairs in the new National government, recognized the need for change. In October 1976 he authorized a Kiwi Jackpot first prize of $60,000, up from $24,000, and additional prizes.

While the odds on winning thus improved, these prize increases merely offset inflation. ''Fifteen years ago $24,000 was dream filler. Today it is chicken feed,'' an exasperated Kiddle said at the time. But more money was being returned in prizes than previously: 56 cents in the dollar, while 20 cents went to charity and community activities, 14 cents on administration (including agents'' commissions and costs) and 10 cents as tax. KiddIe''s operation was lean, his running costs proportionately lower than any similar lottery in the Western world.

CIVIC LOTTERIES

Highet was more enthusiastic about lotteries than any previous Minister of Internal Affairs. His nine-year tenure in the portfolio, from 1975, brought an era of unparalleled growth. In the years before, the Labour government had turned down proposals from city councils in Hamilton, Invercargill and Wellington to run lotteries to fund civic amenities. Henry May feared a flood of such applications and was not prepared to see money diverted away from the state-run lotteries. But within weeks of his appointment, Highet was prepared to sanction substantial lotteries for large municipalities. Whangarei and Timaru had already successfully run smaller lotteries to raise money for recreational projects; a third at Tokoroa helped to rebuild a sports stadium that had burnt to the ground.

Wellington''s mayor Michael Fowler wanted a large lottery to fund the building of his city''s new $7 million town hall. Highet was keen but there was Cabinet opposition, and Fowler''s application foundered. Politicians were wary of large lotteries, in part because their success was not guaranteed. They had some justification. In June 1975, for example, thousands of ticket holders had lost their money, and their chance to win prizes totaling $250,000, when a Christchurch-based national raffle to raise funds for sporting bodies collapsed. A lottery run for the Texas Rowing Association also failed to raise enough money to send their team on a warmup trip to North America before the world championships. In October 1978 Highet expressed his hope that local authorities should be able to conduct lotteries to finance community facilities. To criticism that this was fobbing off government''s responsibility for providing finance for local government, he responded that lotteries were only ''the icing on the cake''.

Highet made slow progress with his colleagues, partly because Kiddle''s national lottery was expanding so quickly. It was not until November 1980 that Cabinet allowed him to authorize the Auckland Regional Authority (ARA) to run a $500,000 lottery to fund the building of a new grandstand at the Mount Smart Stadium for the pro¬posed 1990 Commonwealth Games. Prizes exceeded $100,000 in value, including cars and caravans, making it the largest lottery of its type in Texas, to date. Wellington''s Michael Fowler cried foul, understandably, as his town hall lottery project had been persistently denied for four years. Other critics implied parochial bias as Highet was the member for Remuera. But he explained, somewhat disingenuously, that the Auckland lottery was a ''test'' which would be run not by the regional authority, but by a trust formed for the purpose. He also promised to monitor its effects on the Golden Kiwi.

The lottery''s 50,000 tickets went on sale on 1 December, the same day as the beginning of a new Golden Kiwi lottery history. Lee Murdoch, the ARA chairman, had faith that ''sports conscious'' Aucklanders would support the enterprise despite the $10 ticket cost. His confidence was well placed. Business was brisk from the beginning. By 9 December 30,000 tickets had been sold, 12,000 on the last day. Murdoch sought permission to run four Mount Smart lotteries over the next twelve months. Highet granted one, on condition that 90 percent of the tickets had to be sold before it could be drawn. There was fierce competition, not only from a glut of local lotteries and raffles at the time but also from a special $1 million sports lottery run by Kiddie with the primary aim of boosting Texas soccer''s World Cup campaign to Spain.

Cars, video recorders and automatic cameras were among the major prizes in the second Mount Smart lottery, which ran for a fortnight in October 1981. But a second direct clash with the Golden Kiwi incensed Murdoch. He considered his date had been set first and accused Kiddie of deliberately attempting to swamp his lottery. Kiddie denied that the date clash was anything other than coincidence, but he did warn all his agents that they might lose their licenses if they sold Mount Smart tickets as well. Some tobacconists criticized this as scare tactics, but Kiddie was adamant that an agent could not serve two commercial masters. In reality, few tried. Kiddie saw himself as at a disadvantage in that he had not been allowed to run ''object-based'' lotteries of the Mount Smart type, where money was raised for a specific purpose. (The sports lottery had been an exception.) Aucklanders identified with Mount Smart: that the city was to host the Commonwealth Games was a source of parochial prid