Blumenthal Warns Keno Could Imperil State's Slot Revenues
Rell says game could net $60M, but effect on $400M deal with tribes unclear
By Ted Mann Published on 6/2/2009
Hartford - Attorney General Richard Blumenthal urged lawmakers to move cautiously as they consider whether to direct the Connecticut Lottery to offer keno, saying a “unilateral” embrace of the game could imperil Connecticut's lucrative revenue-sharing agreements with the tribal owners of Mohegan Sun and Foxwoods Resort Casino.
Legal precedent in other states and Connecticut's statutes provide “no definitive answer” about whether introducing keno would violate Connecticut's gaming agreements with the Mohegan and Mashantucket Pequot tribes, Blumenthal said.
Legislators should seek to amend the gaming accords before initiating keno, Blumenthal said, citing the risk that the tribes would sue for breach of their agreements and attempt to withhold Connecticut's 25 percent share of casino slot machine revenue, which totals roughly $400 million per year.
”We are not foreclosing, but definitely forewarning that more than $400 million could be put at serious risk by unilaterally enacting a statute to provide for keno gaming,” Blumenthal said at a press conference with Rep. Stephen Dargan, D-North Haven, who requested Blumenthal's opinion, and Sen. Andrea Stillman, D-Waterford. Dargan and Stillman are co-chairmen of the legislature's Public Safety Committee, which has oversight on gambling matters.
Gov. M. Jodi Rell proposed implementing keno last week, a move she said could eventually generate $60 million per year in new revenue for the cash-strapped state.
Keno has been aggressively lobbied by some who would stand to benefit from the game, a centralized, computerized drawing in which 20 numbers out of a possible 80 are selected at random.
Players at participating locations, including in many states' bars and restaurants, seek to pick up to 10 of the winning numbers. Drawings are usually held just minutes apart.
Among those lobbying for the game is Scientific Games, currently a vendor for the Connecticut Lottery Corp., which offers keno in other states.
At issue, Blumenthal said, is whether keno constitutes a permissible innovation of lottery gambling, or a casino game. The state agreements with the tribes give the tribes the exclusive right to offer a list of specific casino games, but it is unclear if keno falls into that category.
The state's Division of Special Revenue, which regulates gambling and the casinos, has said keno is a lottery game and could be legally offered by the lottery without violating the gaming compacts, but Blumenthal said more review - and greater detail from Rell on the specifics of her proposal - is necessary.
”The courts in other states are divided, there's no court ruling definitively resolving the question here in Connecticut, there's ambiguity in the statutes, and there is a complete lack of explanation or detail in the proposal as it has been made so far,” Blumenthal said.
But supporters of keno noted that Blumenthal himself had referred to keno as “a lottery type game” in a 2005 press release related to a Foxwoods Internet gambling promotion.
Blumenthal's proposal yielded a conflicted response from the Mashantucket Pequots. A tribal spokeswoman, Lori Potter, first e-mailed a statement saying simply, “We acknowledge that Attorney General Blumenthal has an accurate understanding of the slot agreement.”
Potter later retracted that statement, and said that tribal authorities “have not reviewed the Keno proposal and at this time are unable to comment on either the proposal or the Attorney General's statement at this time.”
Mohegan Tribal Chairman Bruce “Two Dogs” Bozsum said in a written statement that the tribe “will more fully consider the proposal after our legal team has had the opportunity to review the final language and the State's definition of this new game.”
”The Mohegan Tribe has always felt that communication and cooperation, when possible, between our governments is critical and we look forward to hearing more about this proposal so we can properly respond,” Bozsum said.
The proposal has generated broad concern among opponents of gambling.
Rell's move to implement keno is “born of desperate thinking and is likely to create more problems than it solves,” said the Connecticut Council on Problem Gambling, in a press release. The group suggested its introduction could increase intrusive gambling-related advertising and could lead to the introduction of other forms of electronic lottery games.
Senate President Donald E. Williams Jr., D-Brooklyn, has called keno “a misery tax,” suggesting it would raise revenue from those least able to pay.
And Stillman confirmed at Blumenthal's press conference that she remains skeptical of moves to broaden legal gambling in the state, warning that the introduction of the game in restaurants and bars could exacerbate both obsessive wagering and potentially drunken driving.
”I am not in favor of expanding gambling,” said Stillman. “… If it's something that ends up in bars, are we going to have people having another drink at the bar, waiting for that next keno card to come up?”
While Rell has urged lawmakers to include the game in a budget deal for the 2010-11 biennium, which begins July 1, Stillman said it would take “far more time than one month” for the legislature to decide if it was really a worthwhile idea.
EDITORIAL FOOTNOTE: How much does Keno make the Mohegan Tribal Gaming Authority? My observation of the Keno area at both Foxwood Resorts Casino and the Mohegan Sun don't look like money makers. Maybe the casinos should promote this game more? I remember going into the Mohegan Sun and having dinner and my party would be playing Keno while they ate. I don't see that happening as much anymore. I believe if Connecticut wants Keno, then the state should renegotiate the compacts with the casinos and they should pay a lower precentage on the slots. It might actually help the MTGA. At least this time, Chairman Bruce "Two Dogs" Bozsum didn't threaten the state with holding back revenue from the state. What do you think?