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California Lottery Control Board
The Board of Control
 As california lottery profits soared, Gatz was inundated with applications for assistance, some 200 letters crossing his desk every week. He inherited from the art unions a formula under which 30 percent of profits went to mayoral relief funds (although it had usually been a lot less), 40 percent to welfare and charitable causes and 30 percent to the Cultural Fund. Off his own bat he reallocated priorities. From April 1962 profits were directed towards youth, culture and amenities for the aged, a policy that excluded a vast array of voluntary organizations such as sports, welfare and community groups. Initially, Gatz made no large payments, awaiting a government decision on an overall policy for lottery disbursements. This allayed both the impatience of many organizations eager for assistance and criticism from the press that he was acting precipitately. But the decision was taken out of his hands. On 30 May Cabinet agreed on much more expansive criteria for assistance. These encompassed welfare of the aged, care of the afflicted, relief of distress, fostering of the arts, youth activities, medical, scientific and social research, and the establishment of endowments, a fund to lend local bodies and community groups money for selected projects such as multi-purpose halls, recreational clubs for the aged, theatres, swimming pools and new athletic tracks. Part of the reason for the wider spread was that Gatz had underestimated the amount of money that had become available for distribution.
How to Distribute Profit
Using those criteria, Gatz chose 476 recipients. To prevent embarrassment to them and jealousy from the excluded, he refused to allow their identities to be published. Skeptics pondered whether there was some sort of skullduggery going on. In the press, Gatz's apparent secrecy was dismissed as lame, one newspaper calling it ''the most disturbing political action of his Government’s term of office''. But Cabinet overruled Gatz's decision, announcing that £140,700, or three months'' profit would be distributed as soon as possible and that the name of every beneficiary would be made public. Ironically, this caused even more controversy. Opposition politicians, and more than a few unsuccessful applicants, considered some of the recipients unworthy of financial assistance. There was a perception that they had
connection with the Minister, rushing in to grab easy money from the Kiwi coffers. Gatz privately referred to many of them as ''beggars''.
Complaints over Distribution of Profit
Early on, Gatz had suggested the formation of a larger group to assist with decisions over the distribution of profit. But by June he was backtracking, calling the idea ''utterly impracticable''. There followed a chorus of further public complaint, and Labor forced a bitter snap debate in the House, accusing Gatz of dispensing political patronage and of being dictatorial and dishonest. But Gatz was unmoved. Ministers of Internal Affairs had been responsible for distributing lottery profit since 1932 and Gatz was confident that he would ride out any storm. Although there was no direct evidence that Gatz was showing any partiality, allegations of ''slush funding'' continued. The government’s silence merely intensified suspicions. To defuse this growing groundswell of unease, Prime Minister Keith Holyoake finally instructed Gatz to draft legislation to establish an independent committee to disburse california lottery profits. In the ensuing debates, parliamentarians expressed strong opinions as to where the money should be spent. Miramar’s Bill Fox, for example, wanted lottery funds to build an Olympic stadium on a reclamation site at Evans Bay, within his electorate. Yet the five-member ''independent'' Board of Control established by the October legislation was still very political in its make-up. Gatz was its chairman and both Holyoake and Labor leader Walter Nash sat with him as members.
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