CT Lottery fights the odds, tries to save keno

New York Lottery

The 20 winning numbers drawn from a field of 80 at 1o:04 Thursday night in Quick Draw, the New York Lottery's version of keno. Picking five correct numbers won $2. Picking 1o won $100,000.

In the oddly one-sided debate over whether to stop the Connecticut Lottery Corp. from launching keno, the Lottery seems to have found its voice, perhaps inspired by its old marketing slogan: “You can’t win, if you don’t play.”

For the first time, a top Lottery official admits wanting to save the game, which Gov. Dannel P. Malloy and top legislative leaders are willing to abandon before the first bet is placed. With no one else defending keno, the Lottery is ready to play.

“When it comes to keno, we need to have an open conversation, and we really need to reboot that conversation and base it on what we need now,” said Frank Farricker, the chairman of the Lottery Corp. “I have a responsibility as chairman of the board to represent the corporation.”

Farricker, who made his comments during an interview with The Mirror, expects to testify Tuesday at a public hearing in Hartford against legislation that would strip the lottery of its right to offer keno before the game is launched and the first dollar is bet.

“This is a surprise,” Farricker said, referring to House Speaker J. Brendan Sharkey, D-Hamden, and Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, suddenly calling for repeal. “I thought we were done.”

Farricker, a Malloy appointee, said he was neither encouraged nor discouraged by the administration to defend keno.

Andrew Doba, a spokesman for Malloy, said the governor intends to sign a repeal bill should one be passed but that he views the Lottery Corp. as an independent entity, free to argue for what it sees as the best policies on gambling.

Keno is a centralized electronic drawing game, whose results are broadcast on video screens in bars, restaurants and stores in the states where it is offered, including New York and Massachusetts. In New York, a drawing is held every four minutes.

Players pick between one and 10 numbers from an 80-number field. Picking five correct numbers on a 10-number bet wins $2, six gets $10, seven $45, eight $300, nine $5,000 and ten $100,000. Odds of winning $100,000 are one in 9 million.

Farricker understands reservations about the game: Any expansion of legalized gambling generates a measure of unease, even in Connecticut, a state that sells more than $600 million in instant tickets every year and nets $300 million in annual revenue for state government.

Keno was approved last year without a public hearing or debate, leaving many legislators and the public uncertain as to how dramatic an expansion of gambling it represents. Instead of being passed in a separate bill, it was added in late May to the final version of the budget.

No one is taking responsibility.

“The way it was passed, it doesn’t generate a great deal of confidence,” Farricker said.

Just as no one took responsibility for its inclusion in the budget, no one has been lobbying to save it: not Scientific Games, the vendor set to provide keno drawing system; and not the two tribes that stand to share in the profits.

The Mashantucket Pequots and Mohegans have exclusive rights to operate slot machines in return for sharing with the state a share of the proceeds. The deal produces nearly $300 million a year for the state, slightly less than the net revenue generated by the Lottery.

The tribes say that keno is a form of slots. To avoid litigation, the legislation passed last year as part of the budget authorized the Malloy administration to offer the tribe 12.5 percent of the net revenue from keno.

Once the administration gets the tribes to agree to an amendment of the slots deal, the Connecticut Lottery is authorized to go ahead with keno, which would expand the Lottery’s presence by adding hundreds of bars and restaurants to its vendor network — unless the measure is repealed.

Keno is not politically popular, according to most polls. While legislators are not lining up to defend the game, some are reluctant to give up on its promise of modest additional revenue, given the projections of budget shortfalls after this year’s expected surplus.

The legislature’s Finance, Revenue and Bonding Committee, which has jurisdiction over raising revenue, declined a request from the legislative leadership to draft a bill to repeal keno.

“From the finance committee’s perspective, this is not a year where we’re looking to eliminate revenue,” said Rep. Patricia M. Widlitz, D-Guilford, co-chairwoman of the committee. “We didn’t want to do a now-you-see-it, now-you-don’t kind of tax policy.”

The Public Safety and Security Committee agreed to raise a repeal bill and schedule a public hearing for 12:30 p.m. Tuesday.

“I don’t know what’s going to happen,” said Rep. Stephen Dargan, D-West Haven, co-chairman of the Public Safety and Security Committee, which is holding the hearing Tuesday on repeal. “We think it’s important to hold the hearing. We want the public to have the opportunity.”

The lottery corporation says it has no data on who would be attracted to keno.

Diane Patterson, vice president of marketing, said last fall that she had no research indicating whether keno will draw new bettors, encourage more betting by existing customers or simply shift the market from existing games.

There probably will be a bit of all three, she said.

In New York, Quick Draw bets were 6.5 percent of the lottery’s gross sales of $8.9 billion in 2012, up from 5.9 percent in 2011 and 5.4 percent in 2010.

In Massachusetts, the $790 million wagered on keno in 2012 was 17 percent of the lottery’s gross revenues of $4.7 billion.

Connecticut’s legislature has estimated that keno could net the state $27 million, starting in 2015.