Keno: A gamble for state in more ways than one

With the state facing billions in deficits in coming years, lawmakers are warming to the idea of a new revenue stream: Keno gambling.

“We are in tough economic times and let’s face it, there’s a number of people who have trouble not voting for things that cost money,” said Rep. Stephen D. Dargan, D-West Haven.

Dargan is co-chairman of the Public Safety and Security Committee, which is holding a public hearing Tuesday on a bill that would allow Keno.

While support for the idea is growing, some uncertainties remain. For one thing, it’s not clear that legislation is needed for the state to operate a Keno game. More important, there are concerns that launching the game could cost the state far more than it would bring in.

Keno is an electronic bingo-like gambling game popular in restaurants and bars in Connecticut’s surrounding states. Last year when Gov. M. Jodi Rell pitched Keno in her budget, lawmakers ignored it. But this year, as the economy worsens, $60 million in new revenue seems to be just too enticing for lawmakers to ignore again.

Senate Majority Leader Martin M. Looney of New Haven calls offering Keno “attractive.” House Minority Leader Lawrence F. Cafero Jr. of Norwalk says he is undecided and is waiting to see what comes of the public hearing. Both Dargan  and Rep. Jason D. Perillo of Shelton, the ranking House Republican on the Public Safety Committee seem to support the proposal.

But some legislators and other state officials fear state-run Keno would jeopardize a larger pool of money the state gets from agreements with the Indian tribes that run the Mohegan Sun and Foxwoods casinos. The state is expected to gross $371 million this year from their slot machines.

Several lawmakers say they support launching Keno, but want to first be guaranteed that it does not violate the agreements with the Mohegan and Mashantucket Pequot tribes.

“It’s not worth the risk,” said Looney, who hopes the state can overcome the obstacle and launch it soon. Dargan said he believes the tribes would file suit if the state proceeds without first negotiating with them.

At issue between the state and the casino’s compact is whether Keno is considered a lottery or a casino game. The state has jurisdiction to implement any lottery game it chooses. The Mohegan and Mashantucket Pequot tribes have exclusive rights to casino games in the state.

Rell and the Connecticut Division of Special Revenue, which approves lottery games, contends offering Keno would not violate the state tribal agreements because it is a lottery game. Rell’s budget office does not believe it needs legislative approval to launch Keno, but is seeking it anyway.

“We do not think the legislature needs to affirmatively vote to approve Keno because the state already has the authority to engage in a lottery game,” said Robert L. Genuario, secretary of the governor’s Office of Policy and Management. “The fact that we could go forward does not mean though that we will go forward. No decision has been made yet.”

In an opinion issued last year, Attorney General Richard Blumenthal said state law is unclear whether Keno is considered a lottery or a casino game and any conclusion by him on the subject “would be more a guess than a legal analysis.” He noted that courts across the country have ruled both ways on the issue of whether Keno is a lottery game.

To avoid jeopardizing revenue from the casinos’ slot machines, he said, the state should reach out to the tribes and renegotiate their compacts before proceeding.

To date, the administration has not met with Foxwoods to discuss the Keno proposal, said Lori A. Potter, Foxwoods spokeswoman. She said the tribe is reserving judgment on the proposal until more details are known. Phone calls to a representative for the Mohegans last week were not returned.

At Tuesday’s hearing, representatives from both casinos are expected to testify as well as Rell’s budget director, the president of the Connecticut Lottery Corporation and Blumenthal.

Cafero said the future of Keno in the legislature may rest on testimony from Tuesday’s hearing, but right now his party is divided on the idea.

“Obviously, we would like to be making this decision without a gun to our heads and in normal economic times,” he said. “Regardless if the casinos accept it, we need to be fixing the state’s other problems.”