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Rell continues bid for Keno

Says Conn. stands to gain $20m

By Susan Haigh
Associated Press / February 8, 2010

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HARTFORD - Faced with a nagging budget deficit problem, Governor M. Jodi Rell is gambling again on Keno as a way to raise revenues in Connecticut.

The Republican governor proposed allowing Keno - a lottery-type form of gambling, often found in restaurants, bars, and convenience stores - in her new budget as a way to raise $20 million in 2011 and $60 million each year afterward.

This latest push for Keno comes seven months after Rell first suggested Keno, and Attorney General Richard Blumenthal advised the General Assembly to amend the state’s memoranda of understanding with the two federally recognized Indian tribes, whose casinos offer Keno, before embarking on the new game.

If not, Blumenthal said, the state could risk the $400 million that the two tribal casinos provide the state annually in slot machine revenues.

Under the agreements between the state and the two tribes, no other person within Connecticut has the right to operate a “commercial casino game.’’ Blumenthal said state law is unclear whether state-run Keno would be considered a “commercial casino game.’’

Despite that warning, Rell is pushing ahead. Jeffrey Beckham, a spokesman for Rell’s budget office, said Friday the administration believes Keno is consistent with the state’s agreement with the tribes and that the quasi-public Connecticut Lottery Corp. could offer Keno without conflict.

“It is a lottery-type game,’’ said Beckham.

Rell’s budget staff based its revenue estimates on sales figures from Keno revenues in Massachusetts and Rhode Island and then adjusted them to Connecticut’s population. According to industry estimates, Keno generated $3.8 billion in sales from 2004-2008 in Massachusetts, $425.45 million in sales from 2004-2008 in Rhode Island, and $2.38 billion in sales from 2004-2008 in New York.

Thirteen lotteries across the United States operate Keno.

Keno’s fate in Connecticut, however, will ultimately be decided by the General Assembly, said Robert Genuario, Rell’s budget director. He said if the Legislature prefers another way to balance the budget, Rell would be open to considering it.

Blumenthal said Friday that he stands by his legal opinion from June. Representatives from the Mashantucket Pequots and the Mohegans said tribal officials had not yet seen the details of Rell’s proposal.

Paul Young, executive director of the state’s Division of Special Revenue, which regulates gambling in Connecticut, said he disagrees with Blumenthal and that it is clear Keno is a “lottery game’’ that the state can offer.

“We believe it’s a lottery game, and we believe that the tribes play it as a lottery game and it’s not listed in the compact as a table game, so therefore they are playing it under the lottery authorization,’’ Young said.

Young also said he believes the state lottery can begin offering Keno without any legislative action.

It’s expected to take several months to get Keno up and running.

Young said the lottery corporation would have to decide whether to allow existing lottery licensees, such as convenience stores and gas stations, to offer Keno, or solicit new locations, which would have to be licensed.

In Connecticut, Keno is seen as a possible way to raise a lot of money at once. It’s been suggested as a new revenue stream that could be borrowed against over the next 10 years, generating $400 million.

Total lottery sales in Connecticut in 2008 were nearly $988 million.