Connecticut Governor Jodi Rell said she intends to raise revenue for the state by introducing the gambling game of Keno despite some concerns that the move could violate the state´s gaming agreements with the Mohegan and Mashantucket tribes.
Gov. Rell claims that Keno is a type of lottery game, permitted by current law, and not a casino game, which would prevent the state from starting the game under the agreements, or gaming compacts, with the two tribes.
The Feather News reported earlier that the executive director of the state´s Division of Special Revenue, Paul Young, told the state´s Gaming Policy Board members at a recent meeting that ¨The statutes clearly indicate that the President of the Connecticut Lottery Corporation has the authority to introduce new lottery games, and it rests only with the Lottery organization to decide what games are best for them/the public.¨
The following installment of The Tribes In The Media is a Fairfield County Weekly article on the possiblity of the state´s initiating Keno.
An Outside Chance
Rell gambles again on keno to help out with the state's budget troubles
By Gregory B. Hladky
Fairfield County Weekly
February 11, 2010
Imagine you're a down-and-out Connecticut lawmaker, depressed as hell 'cause you're broke, it's an election year and there's a $500 million deficit hanging over you like an ax. There you are, slouching along in the low-rent part of town, looking in gutters for nickels and dimes, when you hear a seductive voice calling from the doorway of a sleazy, neon-lit dive.
"Hey, why don't ya come on in and play a little keno? It's guaranteed to bring ya $20 million in the first year! And we're offering you a sweet deal to borrow against future winnings! How does $400 million up front sound?"
That's the come-hither scenario Gov. M. Jodi Rell and her budget chief, Robert Genuario, are pushing as part of a budget solution. It's not a new idea. Rell tried it out in the middle of last summer's budget crisis, but the General Assembly turned her down cold.
This time, Rell's added a new twist: She claims she doesn't need legislative approval to legalize keno, which could be played in as many as 900 bars and restaurants across the state. She now claims she can authorize it as a lottery game by regulation.
But some lawmakers fear this is a gamble that could cost the state hundreds of millions in annual revenue from Connecticut's two tribal casinos.
The question is whether keno is a lottery or a casino game.
Modern keno involves small electronic terminals. A player chooses a series of numbers (usually 10 to 15 numbers out of a field of one through 80), trying to match numbers randomly selected by the terminal computer. The more numbers you match, the bigger your winnings.
If keno is considered a casino game, it could break the state's compact with the Mashantucket Pequot and Mohegan tribes. In return for giving the tribes a monopoly on casino-style gambling, the state gets a 25 percent split of their slot revenue. This year, the state is hoping to pull in a cool $346 million from the deal.
Last June, state Attorney General Richard Blumenthal warned the whole issue was murky, that some states with keno have labeled it a lottery game and some a casino game. The same is true of various court decisions. Blumenthal recommended renegotiating the agreement with the tribes or having the legislature define what keno is.
"Concluding whether the proposed keno is a lottery game would be more of a guess than a legal analysis," Blumenthal said at the time. He said last week he stands by his earlier opinion.
Genuario's interpretation is that Blumenthal didn't make any hard-and-fast ruling on exactly what keno is, so why not go ahead and try? "We think it's very much akin to a lottery," Genuario said. "We don't think there is a risk of jeopardizing the money the state gets from the casinos."
He added, "It's a legitimate revenue stream that many other states use."
Officials with the National Conference of State Legislatures say 13 jurisdictions have legalized keno in one form or another, including California, Georgia, Kansas, Maryland, Massachusetts, Michigan, Missouri, New York, Oregon, Rhode Island, Washington, West Virginia and the District of Columbia.
Officials of the Mohegan and Mashantucket tribes aren't about to show their cards this early in the game.
"It would be premature to comment," said Chuck Bunnell, chief of staff to the Mohegan tribal government. Bunnell said that, since the tribes haven't seen details of what Rell's administration intends, they don't know if their casino profits might take a hit. "It would depend on exactly how it was being conducted," he said.
Bill Satti, spokesman for the Mashantucket Pequots, said his bosses couldn't respond until they saw the state's keno plan.
One thing is certain. Neither of the tribes will be thrilled by anything that cuts into their gambling revenues when profits at both casinos have been hammered by the recession.
In 2007, the state's share of slot revenue from both tribes hit a high of $430.5 million. The General Assembly's fiscal hotshots are predicting the state's slot take this year will be about $84 million less.
"Revenues are down at the tribes because discretionary dollars are down," said state Rep. Stephen D. Dargan, D-West Haven. "People can't afford to pay their rent, never mind going to casinos."
Dargan is co-chairman of the legislature's Public Safety Committee, and he's getting freaked out by the Rell administration's keno plans.
"I'm worried about losing that [casino] money," he said. "I think the administration needs to come up with a plan and run it by the two tribes to see if it is in violation" of the compact.
State officials say they don't have a detailed plan right now. They say the intent is to put keno terminals in bars and restaurants, maybe 500 to start with, and another 400 coming later.
Dargan is sure the tribes will take the keno issue into the courts, "Especially if we try to shove it down their throats by regulation. That's not the way to govern."
Genuario insists he isn't worried by the threat of a court challenge.
Someone who is worried is Marvin A. Steinberg, executive director of the Connecticut Council on Problem Gambling. "This would be the introduction of a major new form of gambling," he said, arguing electronic keno is a particularly insidious form of gambling.
According to Steinberg, "People get hooked more easily on electronic keno" than many other types of gambling because of the "frequency of reinforcement" keno offers.
"You can plan numerous games in a few seconds," he said. Steinberg said terminals can be set up to offer "little incentives to reward people for playing." Since the terminals would be at bars and restaurant tables, it would also make it easy for people to get hooked and tough for problem gamblers to avoid the lure.
"All these things increase the risk of problem gambling," Steinberg said.
The problem for Rell, Genuario and those sad-sack lawmakers is they're running out of deficit solutions. If not keno, then what? Raise taxes again? Cut social programs? In a mother-loving election year?
Genuario is taking a laid-back approach as he punches in his bet on keno.
"I don't think it's a big gamble," he said.
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