Proponents told members of the Finance, Revenue and Bonding Committee on Wednesday that bringing keno to Connecticut is essential to keeping the state’s lottery competitive with other states’, while opponents decried the game as a short-sighted and ill-advised way to generate revenue.
The bill would allow the Connecticut Lottery Corp. to offer keno throughout the state and is projected to generate $5 million in its first year after startup expenses. After that, proponents say keno will generate $20 million in the second year and $30 million in the third year.
“(Keno) will ensure that the lottery will remain a stable and sustained source of revenue for the state, not in the short term but in the long term,” Connecticut Lottery Corp. President and CEO Anne Noble said.
With the waning popularity of Powerball and MegaMillions, the lottery needs to diversify its offerings, Noble said.
Keno is offered in neighboring states including Massachusetts, New York, and Rhode Island, and has the potential to become more popular than Powerball, she said.
“Unfortunately, keno has been repeatedly mischaracterized to all of you as electronic gambling,” she told committee members. “It is not. It is not a slot machine. For those that want to play the lottery and play keno, it’s another form of entertainment while dining. For those who don’t want to play, it will often go unnoticed.”
Retailers who already sell other Connecticut Lottery games are eager to add keno, she said. If the bill is passed, the game could be played in bars, restaurants, and convenience stores.
“It’s a great way to bring more lottery business to small-business owners throughout Connecticut,” testified Chintan Patel, owner and operator of Dada Deli in Waterbury. “(Keno) should help small-business owners, not only casinos.”
Currently, keno is permitted only at the Mohegan Sun and Foxwoods Resort Casino through a compact the casino owners entered with the state. The proposed legislation is contingent upon the state reaching agreements with the Mohegan Tribe and Mashantucket Pequot Tribal Nation, and would give a cut of the lottery’s keno proceeds to each tribe.
The tribes have “deep concerns” about the specific language of the new legislation, said Charles Bunnell, chief of staff of external affairs for the Mohegan Tribe.
“Specifically, the definition of keno has changed to something too loosely defined to be acceptable,” Bunnell testified.
The tribe is eager to work with lawmakers but wants to do it “in a way that does not impact the revenue-sharing agreement that has been in place with the state for over 20 years,” Bunnell testified.
Keno has been proposed in Connecticut previously in 2010 and 2013. It was adopted in 2013 to close a budget gap, but quickly repealed in 2014 before it could be established.
“The public, through the General Assembly, has spoken that this is not what they want,” Sen. Tony Hwang, R-Fairfield, said while testifying against the bill. “We as a state should not be in the business of condoning gambling as a revenue source.”
Hwang said bringing keno into restaurants could lead to higher rates of gambling addiction in the state and expose children to gambling at a young age.
“A parent, in an innocent way, could expose their children to the idea that gambling is acceptable in a formal dining experience,” he said. “We are looking at creating a generation of people who would be addicted to gambling.”
Gambling addiction has “shattered” people’s lives, Hwang said, and that cost must be weighed against potential revenue the game would bring the state.
“This kind of expansion is an ill-advised foray in seeking a short-term solution in revenue,” he said, adding that with too much gaming expansion Connecticut will begin to resemble Atlantic City.
The bill is not just about generating revenue for the state, but also about ensuring the lottery remains competitive, said Rep. Jeffrey Berger, D-Waterbury, co-chairman of the Finance committee.
“It’s unfair to the Connecticut Lottery to say that, if we institute keno, then Connecticut’s going to be like Atlantic City,” Berger, who supports the legislation, said. “That’s a whole different (business) model.”
Berger and Noble both noted that the lottery financially supports gambling cessation programs for those with an addiction.
“It’s important for the state of Connecticut to support the Connecticut Lottery,” Berger said. “They need to be competitive. If we enact keno, that’s not taking care of our revenue problem, but what it will do is support the Connecticut Lottery in its business model.”
Berger refuted Hwang’s claim that having keno in restaurants is anti-family, saying that most who opt not to play the game would not notice its presence.
Rep. Russell Morin, D-Wethersfield, also said he supports the legislation.
Other committee members, however, were more hesitant about the bill.
Rep. Roland Lemar, D-New Haven, the committee’s vice chair, said he is “very reluctant to support (keno) at this point.”
Studies have shown that keno can be more addictive than lottery scratch tickets, Lemar said, and he wants more assurances that the lottery will work to combat problem gambling.
Rep. Vincent Candelora, R-North Branford, said he worries about turning to the lottery to solve revenue problems. “It does concern me, the road we’re going down,” he said.
If the bill were to pass, Noble said much of the needed infrastructure is already in place from when it previously seemed like keno would be legalized.
Retailers would be trained in how to offer keno “responsibly” and how to connect problem gamblers with resources that can help them, she said. The lottery also would launch at least two widespread awareness campaigns addressing gambling addiction, she added.
“We recognize at the Connecticut Lottery that, even if it’s just a small portion of the population that has a problem gambling, we have an obligation to act,” she said. “We do that.”