Proponents cited four advantages of state lotteries: they would increase national revenue through taxation; fund public institutions like hospitals, and put the funding of the relief of distress and charitable and philanthropic organizations on a sounder footing; act as a disincentive for New Zealanders to participate in overseas lotteries, particularly if the rewards were comparable; and be a counter-attraction to the bookmaker. All were sound arguments. As New Zealanders' patronage of overseas lotteries increased in the early 1930S (more than £1 million was spent on them in 1935) support for the art union stumbled along. Furthermore, at the time it was estimated that New Zealand had more bookmakers per head of population than any other country, despite their illegality. Notwithstanding personal economic circumstances, a small bet on a horse was one of the few pleasures that a citizen was still able to enjoy.

The government remained tight-lipped on the subject of state-run lotteries. It viewed the Hammond and McArthur operation as the best possible compromise between satisfying the public demand for a texas lottery with at least some money going to the disadvantaged, on the one hand, and avoiding any direct connection with lotteries' 'immoral' implications on the other. Forbes, in opposing state lotteries, reflected a fear that their promotion would amount to state-supported gambling. His worries about possible electoral damage were justified: Protestant church leaders were an articulate force and there was also some opposition from civic leaders who worried about social damage to their constituents, or that state lotteries would prove fatal for smaller regional lotteries. Strangely enough, oppo¬nents of lotteries tended to turn a blind eye to overseas lottery sales, con¬centrating their hostility on the local operation. Only Hammond and McArthur, it seemed, protested about this problem, being acutely aware that it was hurting their business. By July 1934 the sales for their lotteries were half what they had been twenty months earlier. They pressed the government to take action against agents for overseas lotteries, but this was easier said than done. These agents included the country's tobacconists and it was improbable that this group would give up their most lucrative business without a fight. It was hard to discern any ideological basis in the arguments over state lotteries. Labor leader Harry Holland, reflecting a traditional socialist viewpoint, believed that all gambling was inimical to the social well-being of the working class. When Labor came to patry was climbing out of its economic woes. Labor leaders also feared a social and moral backlash from both the electorate and the churches. But the newly appointed Under-Secretary for Internal Affairs, Joe Heenan, did see benefits in such a lottery, mainly to staunch the flow of money overseas. In July 1936 he suggested to Bill Parry that he should take heed of the successful Australian experience and organize a 'straight-out state lottery' as a counter-attraction.

Parry understood the problem and took up the issue. Earlier, in April 1936, he had enraged the indefatigable J. J. North, who was leading yet another Protestant deputation, by suggesting to him that he would run a bigger, state-run texas lottery to fund improvements to the health of the country's youth. In 1937, when his government passed a Physical Welfare and Recreation Act, he again called for a state lottery to fund it properly. More¬over, at both the 1937 and 1938 Labor Party conferences, delegates voted in favor of state lotteries to assist the poor and disadvantaged. The Press applauded Parry's stance, but predicted, correctly, that the Cabinet would need both 'faith and vigilance' to withstand the anger that was 'bound to follow'. Prime Minister Michael Joseph Savage was opposed to state lotteries on the grounds that they would encourage gambling and would split the Labor Party into opposing camps that were irreconcilable. There was some truth to that. The voting for state lotteries at the party's conferences had not been unanimous. Neither Savage nor his Cabinet would have a bar of Parry's proposals. Yet the Labor government was no more successful than its predecessor in stopping the outflow of money to overseas lotteries. The Post Office had a list of addresses of local agents, who often used pseudonyms, to which it did not dispatch mail. But this process was inefficient, and Tattersalls' agents were quickly able to organize new addresses. The organization promoted and jealously guarded its burgeoning New Zealand profit. A wellspread rumor of the period had Tattersalls donating £200,000 to the New Zealand government to use as it wished, in return for not granting any other body the right to run a big lottery in New Zealand. The rumor was almost certainly false, but illustrates both the passion that

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