A Republican state senator wants to expand gambling opportunities in Vermont.
In the last-minute wrangling over the state budget bill, Sen. Kevin Mullin, R-Rutland, stuck in a provision that requires the Vermont State Lottery Commission to issue a report on Keno, a computer bingo game, to a group of lawmakers in November.
“We should be looking at all kinds of revenue sources,” Mullin said. “Nobody likes gambling, but the reality is, people will leave the state to go gambling elsewhere. I think it’s worth exploring.”
The Joint Fiscal Committee will review the report. Any proposal to move ahead with an expansion of the Vermont Lottery could meet with stiff resistance from the House. Both House Speaker Shap Smith and Janet Ancel, who heads the powerful House Ways and Means Committee, are adamantly opposed to the idea.
“Call me a politician in the Howard Dean mode on this particular issue,” Smith said. Dean blocked formation of all lottery games in Vermont during his 10-year tenure.
Vermont currently offers 10 games, including Powerball, Pick 3, Pick 4, Megabucks and Mega Millions, all of which are instant ticket or jackpot games offered at retail outlets.
Keno, by contrast, is a computer-based game played at terminals located in casinos, bars, restaurants, stores and bowling alleys. Players match 10 out of 20 numbers from a total of 80 that are randomly generated. Winning numbers are chosen in four-minute intervals.
Mullin, chair of the Senate Economic Development Committee, looked into Keno as a way of bolstering funding for schools. In southern Vermont, he said, residents travel to neighboring New York and Massachusetts to play the game.
Fourteen states offer Keno, including Massachusetts, New York and Rhode Island. Total sales exceed $3 billion and are ranked third, behind Powerball and Pick 3, Pick 4 in those states, according to Greg Smith, director of the Vermont Lottery. Smith described Keno as “one of the most popular games within the lottery industry in the United States.” Sales growth was 7 percent in 2011 to 2012, Smith wrote in a brief description of the game recently distributed to lawmakers.
The addition of Keno to the state’s arsenal of sanctioned gambling games would expand the Vermont Lottery’s base and the number of agents statewide, according to the brief. There are currently 700 lottery agents in Vermont. The state’s gaming vendor Intralot, based in Atlanta, offers Keno in other states.
Another attraction? The game would likely lure residents from New Hampshire, which doesn’t offer Keno, to Vermont, according to the commission.
In an email to state senators last month, Greg Smith said he supports bringing Keno to Vermont. The study will be designed to answer a number of questions about the logistics of bringing the new game to the state.
All profits from the Vermont Lottery go to support the Education Fund for public schools.
The Lottery’s gross sales were $101 million last year; the state netted $22.3 million. Keno would add $1.8 million to $4 million annually to the net total over a three-year period. Since 1999, the Vermont Lottery has generated $280 million for the Education Fund.
Mullin and Sen. Alice Nitka, D-Windsor, a member of the Senate Appropriations Committee, say at a time when revenues are scarce no option should be ignored.
Nitka says policy considerations need to be weighed, but a study of Keno at a time when lawmakers are “looking under every stone for money” makes sense.
The Education Fund, in particular, could be under a great deal of pressure next year.
This year the Vermont Legislature approved a 5-cent increase in the statewide property tax to support a 5.4 percent average increase in school spending for fiscal year 2014.
Lawmakers are concerned that the state could see an additional 6-cent increase next year. At the end of the session they passed H.538, which lowers the cap for school spending. Currently, school districts pay a penalty when their per-pupil spending hits 125 percent of the state average. The bill lowers the threshold for that penalty to 123 percent in Fiscal Year 2015, and to 121 percent in FY 2017.
Key lawmakers have suggested that education property tax reform will likely be a priority next year.
Mullin is confounded by Speaker Smith’s and Ancel’s out-of-hand rejection of Keno.
“These are the same people who objected to regulating break-open tickets,” Mullin said. “It’s almost bizarre.”
After months of debate over whether to require clubs and bars to register as vendors of break-open tickets, House lawmakers on the fee bill conference committee blocked a proposal to regulate the underground industry, which by some estimates generates as much as $140 million a year in Vermont.
“If it was up to me, I’d put a casino on Killington (ski area),” Mullin said. “I am alone in that but it’s a good revenue generator. We’re not going to stop people from going to Foxwoods and Indian reservations in New York. It’s lost potential revenue. There’s just more and more places to go to.”
Ancel said it would be a mistake to expand the lottery.
“We are less dependent on gambling than most other states, and I think that’s a good thing,” Ancel said. “States that are dependent have to keep expanding it in order to attract people to the games. We’re lucky we haven’t gone down that road, and I wouldn’t support our doing that anymore than we already have.”
