The Connecticut Lottery Corp. on Thursday approved a seven-year contract that could bring keno gambling to the state by early next summer.
The agreement allows the lottery to spend $5.4 million, payable in two installments of $2.7 million, to the New York-based Scientific Games Inc., on the equipment, software and other investments needed to launch and maintain keno in Connecticut.
The contract approved by the board calls for the addition of up to 600 new retailers, such as bars and restaurants. Keno would also be available in some of the lottery’s roughly 2,800 current retailers.
Lottery President Anne M. Noble and other lottery officials did not provide details of where keno will be played, but she said the emphasis be on “places where people gather.”
Thursday’s agreement is still contingent on two factors: the state and representatives from the two Indian casinos must sign off on an agreement that will net them a combined total of 25 percent of all keno revenue, after winnings are paid out. The lottery also has to finalize its total budget for keno, which will include marketing, training and other costs associated with launching a new game.
Lottery officials expressed optimism that both those conditions will be met soon, enabling a roll-out of keno before the end of the 2014 fiscal year on June 30. “Obviously the world is an uncertain place,” said Frank Farricker, chairman of the lottery’s board of directors. “But we are focusing our goals into making sure we will be up and running this fiscal year.”
Noble said lottery officials are doing “as much as we can short of ordering equipment and hiring people and making major financial commitments” to get ready to launch the game.
“We’ve taken preliminary steps,” Noble said after Thursday’s vote. But, she added, “before we do any hiring, before we order any equipment, before we make major advertising and marketing expenditures, this organization will have a budget like we always do and we’ll have the agreement with the tribes.”
“A new lottery game doesn’t just get turned on,” Noble said. “It’s actually a pretty complex process. There’s software that has to be developed, there’s equipment that has to be ordered, there are game rules that have to be developed. All of those things take time … we’re 100 percent committed to doing this right.”
Keno, considered by critics to be a highly-addictive game of chance, is available in the neighboring states of New York, Massachusetts and Rhode Island. Connecticut’s surprising decision earlier this year to join them was largely shrouded in secrecy. State lawmakers approved a bill clearing the way for keno in the waning hours of the 2013 legislative session without a public hearing. Supporters say the game could bring in bring in $27 million in its second year, after the tribes are paid.
Much of the lottery agency’s discussions on keno have taken place behind closed doors, which has drawn sharp criticism from lawmakers and anti-gambling groups. Thursday’s board meeting marked the first significant step toward the establishment of the game that has occurred in public view.
Noble said the lottery has not commissioned marketing studies to determine exactly who will play the new game. “Whenever the lottery launches a new game, it is looking for a new audience, and whenever the lottery launches a new game, there is some cannibalization of existing games,” she said. “We wouldn’t expect this game to behave differently…
“We look forward to a new audience and we look forward to a net gain.”
One member of the lottery board abstained from the vote: Patrick Birney is a partner at the law firm of Robinson and Cole, which represents Scientific Games.