This Lottery’s the Toast of the Town for Restaurateurs

On Wednesday, Marjory Kadir of North Hollywood will be awaiting a phone call from a state official giving her the lottery results.

She is not concerned, however, with the same lottery over which millions of Californians have gone bananas.

In this lottery, winners will be picked with little fanfare in a spare room at the Inglewood City Hall. Only 315 individuals bothered to enter. And judging by past performance, only about a third of them will show up to watch the master of ceremonies select 25 capsules, the size of prescription bottles, containing the winners’ names.

This lottery is sponsored by the state Department of Alcoholic Beverage Control, which has been holding the event each year since 1961. The prize offered is the rights to one of only 25 liquor licenses for restaurants that the ABC can issue annually in Los Angeles County.

$6,000 to Enter

Kadir and her husband, Abdul, who serve the food of India and Bangladesh at their 18-table Salomi Restaurant in North Hollywood, are among 78 entrants in the San Fernando Valley who have paid $6,000 each to participate. The gamblers include would-be restaurateurs, mom-and-pop restaurant owners who would like to serve more than wine and beer, and chains such as Fuddruckers and TGI Friday’s.

The lottery system was started to stamp out corruption. Before its creation, the state was embarrassed by a series of scandals prompted by the discovery that state employees and political cronies were exchanging liquor licenses for payola.

David E. Robbins, an ABC supervisor in Van Nuys, said the lottery “is probably the fairest way because it gives everybody a chance. . . .

“Even if you have $50 million, you can only win one (license).”

High Stakes

The lottery stakes are high. Losers will get their money back, minus $50. But if they are still interested in getting a license this year, they will have to find one on the open market. In Los Angeles, restaurant liquor licenses now command from $34,000 to $35,000, according to brokers who trade in the licenses.

Liquor store licenses, on the other hand, are going for $10,000 to $12,000 in Los Angeles. A lottery for liquor store licenses has never been held in Los Angeles County because, according to a state formula that allows one store per 2,500 residents, there are far too many liquor stores remaining from an era when they were not regulated.

The state allows one restaurant that serves hard liquor for every 2,000 residents in Los Angeles.

A Los Angeles restaurant liquor license is a bargain compared with prices in Northern California coastal counties, especially San Luis Obispo and Santa Barbara. There, the slip of paper carrying the right to sell liquor is being sold for more than $100,000, brokers said.

Lottery Is Only Alternative

Even the more modest Los Angeles prices, however, are out of reach for people like the Kadirs. Their only alternative is to play the lottery. If they win, they anticipate sales increasing by 25%to 30%.

“Cocktails,” explained Marjory Kadir, “give them an appetite.”

“It’s a long shot,” conceded Steve Restivo, another hopeful who owns Vitello’s, an Italian restaurant in Studio City. Restivo ought to know. For the past seven or eight years, he has never won.

Restivo figures his chances would improve if only legitimate restaurateurs entered. In past years, he said, he has traced some of the addresses of winners to such businesses as dry cleaners and printing shops.

Speculation Discouraged

R.F. Bristol, the district administrator of the ABC’s Van Nuys office, said the state discourages speculating on the licenses by requiring lottery winners to use their licenses for two years before they sell them.

But Doug Johnson, a liquor license broker in Hollywood, said that the lottery nevertheless “is inundated with luck-seekers” gambling they may win a valuable license.

“The spirit of the thing was to give the little guy a chance,” he said. “It would be nice if people who don’t know what they are doing stayed away.”