The two-year state budget passed in the final hours of the 2015 legislative session relies on $43.6 million from keno, but a revenue sharing deal has yet to be inked with the state’s two Indian tribes.
Language in the budget specifies that the Connecticut Lottery Corporation can’t start keno operations until the Mashantucket Pequot Tribe and the Mohegan Tribe sign off on a revenue sharing agreement.
The state currently receives a 25-percent share of the two casinos’ gross slot revenues based on a 21-year-old deal negotiated by former Gov. Lowell P. Weicker. In exchange, the tribes have exclusive rights to conduct casino-style gaming operations in Connecticut.
But the tribes and the state Office of Policy and Management haven’t even started negotiations yet about the state’s share of keno revenue.
State Rep. Jeffrey Berger, D-Waterbury, said talks would take place once Gov. Dannel P. Malloy signs the budget.
During 2013 budget negotiations, each tribe agreed to a 12.5 percent cut of the action in exchange for allowing the state lottery to conduct keno operations outside the two casinos — but the General Assembly repealed the budget provision the next year before it could go into effect.
This time around, Berger said lawmakers did not specify the percentage the tribes would get because “that would be a negotiated term.”
Office of Policy and Management Spokesman Gian-Carl Casa said the department cannot comment on negotiations or negotiation strategies.
Anne Noble, president and CEO of the state lottery, said her organization would like to bring keno to market this January. “We’re optimistic that all the pieces including the tribal agreement will fall into place so we can do that,” she said.
Mohegan Chairman Kevin Brown said the tribe is willing and available to discuss a mutually beneficial agreement to operate keno in the state.
“The legislation approved by the General Assembly this year is clear about the need for Tribal participation,” he wrote in a statement. “The Mohegan Tribe has an excellent government-to-government relationship with the state and meets regularly with state government officials.”
The tribes have been in talks with lawmakers about their effort to compete with Massachusetts by building a smaller-scale casino north of Hartford to attract “convenience gamers” and stem the flow of Connecticut residents across the state border. Under the bill, which is on Malloy’s desk, the tribes would have to come back to the General Assembly to get approval to build the casino after choosing a specific location.
East Windsor, Windsor Locks, and East Hartford have expressed interest in hosting a casino.
There are currently more than 2,800 lottery retailers across the state, according to Noble. That figure does not include the estimated 200 to 600 new restaurants and bars that will be added once keno is authorized.
Lottery retailers receive a 5 percent commission while players bring in about 65 percent of the game’s profits, Noble said. The rest, minus operating expenses, is put into the state’s general fund. She said it’s premature to guess how much will ultimately stay there without knowing what percentage the state will be passing on to the tribes.