Keno proposal gets new life as Connecticut considers new tribal casinos to blunt competition

As lawmakers consider whether to allow satellite tribal casinos near the state's borders, the Connecticut Lottery Corporation wants permission to offer keno to help diversify its portfolio and protect its revenue stream to the state budget.

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Lottery President Anne Noble said while the lottery is financially healthy, it is projecting a decline in contributions to the state's main spending account for the first time since 2008 — from $319 million fiscal year 2014 to $312 million fiscal year 2015. That's due mostly to a drop in Powerball and Mega Millions ticket sales.

"There's a conversation about the casinos expanding off the reservations. That could have a negative impact on the lottery," Noble said. "We want to make sure that $319 million is something that is sustained over time."

By allowing keno to be offered by the lottery's 3,000 retailers and potentially 600 new retailers that run bars and restaurants, Noble predicts possibly $25 million in gross revenues could be generated in the first year, $50 million in the second, $70 million in the third, and perhaps more in the future. The bill up for a public hearing on April 15 in the General Assembly's Finance Revenue and Bonding Committee would set aside up to 12.5 percent of the keno revenue for each of the two federally recognized tribes, the Mohegans and Mashantucket Pequots.

Rep. Jeffrey Berger, D-Waterbury, the committee's co-chairman, supports the legislation. He points out how the lottery currently provides the state with more revenue than the two tribes' casinos — Mohegan Sun and Foxwoods Resort Casino — combined.

Berger said both Connecticut casinos and the lottery are under pressure from out-of-state competition.

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"If we're going to allow for this expansion of the casinos, we cannot disallow the expansion of the Connecticut lottery into keno," he added. "One cannot be done without the other."

It appeared in 2013 that Connecticut would finally join its neighbors and offer keno, a lottery game where numbers are typically drawn every four minutes. However, some lawmakers voiced concern about expanding gambling and the process of how legislation was passed. Last year, the General Assembly agreed to repeal the provision.

During that time period however, the lottery identified about 30 to 35 interested retailers. Noble said teams were also put in place to recruit more retailers. The lottery also developed software, game rules and marketing plans. Also, both tribes, which originally argued they had exclusive rights to offer such games under a compact with the state, had signed off on the plan.

Patty McQueen, a spokesman for the Mohegans, said Wednesday the agreement reached 18 months ago "still stands."

It's unclear however whether there's enough support in the legislature to resurrect the proposal this year.

Senate President Martin Looney, D-New Haven, noted how keno "proved not to be popular" last time around. Looney is one of the chief advocates of the bill that would allow the Mashantucket Pequots and Mohegans to open up to three jointly owned satellite casinos. The final details of that bill, which is awaiting Senate action, still need to be worked out.

"I haven't heard of any active promotion of (keno) as an alternative or as an additional source of gambling. I don't think it's really on anybody's priority list at this point," Looney said. "I haven't been aware of anybody advocating for that. Things can change obviously, but there was a lot of pushback the last time it was considered."