Connecticut Mulls Keno, Sweepstakes Café Questions

Keno in Connecticut appears to be dead now that Governor Dannel P. Malloy has withdrawn his support and key lawmakers say they want to repeal it before it takes effect. But will that gaming be replaced with “sweepstakes” cafes? Not if state Senator Joan Hartley (l.) has her way.

Connecticut Governor Dannel P. Malloy has switched his stance on his initial support for keno by the state lottery. He said last week that he would sign a bill that repeals the recent legislation allowing keno terminals if both houses of the legislature pass one. He added that it was never his idea to put keno into the budget to begin with.

Rep. Tony Hwang hailed the statement, “The Governor’s reversal provides not only an important opportunity to halt keno, but to reverse the growing drive to expand casino-type gambling in general in Connecticut.” 

This development comes as various top officials in the state have lined up against keno, even before the games have been deployed in the 1,000 bars, restaurants and convenience stores where it would be legal.

House Speaker J. Brendan Sharkey last week called for repealing keno before the law takes effect, although he initially voted in favor of the game.

The game was inserted into this year’s budget almost at the last minute and without hearings or much public debate. However the state is now projecting a budget surplus of more than $500 million, obviating the need for the keno revenues.

Senator Andrea Stillman has introduced a repeal bill.

Sweepstakes Cafes

In a separate but related development, Connecticut is the latest state to debate whether “sweepstakes cafes” are a form of gambling.

The police who took part in the recent raid on two businesses that offer the games have come down on the side of the question that they are illegal forms of gambling. The businesses the police shut down were the Mouse Pad Business Center in Enfield and the Bloomfield Business Center in Bloomfield.

The 24/7 businesses offer Internet time on computers to customers who are entered in a sweepstakes and can win cash prizes.

State Senator Joan Hartley, who proposes to introduce legislation to ban or regulate the cafes, commented, “These types of operations masquerade as something they are not in order to avoid proper oversight. A lot of vulnerable populations—especially the elderly and minors—are targeted by these illegal operations.”

Gambling, unless specifically authorized at establishments such as the state’s two Indian casinos, is illegal in Connecticut. Gaming tribes generally maintain that sweepstakes cafes violate tribal state gaming compacts that give tribes exclusivity.

An attorney for Stephen Scott, manager of the Mouse Pad, commented,  “The Mouse Pad business center had conducted an entirely lawful business in Enfield.”

Legal experts say that the law is unclear as to whether sweepstakes games are actually gambling, although most states have determined that they are.

Indian Casinos

Meanwhile, the state’s two Indian casinos, the Mohegan Sun and Foxwoods Resort Casino, are both trying to get a piece of the gaming pie in neighboring Massachusetts. Each is a contender for a gaming license in the state. The Mohegans for a license in Revere, a suburb of Boston, and Foxwoods has indicated an interest in competing for the Southeastern zone license in Fall River.

Each tribal contender lost out on an earlier bid in the Bay State. Executives of both tribal casinos say that its wise to try to expand but that they are not desperate to locate in Massachusetts.

“I wouldn’t say we have to be in Massachusetts,” said Foxwoods CEO Scott Butera, interviewed by the Miami Herald, “We want to be in Massachusetts.” Gaming expert Clyde Barrow of the Center for Policy Analysis at University of Massachusetts, Dartmouth, agrees that the casinos can still operate profitably without Massachusetts, but that they will need to trim their operations.

Foxwoods revenue has declined 34 percent over the last decade, compared to 31 percent at the Mohegan Sun during the same period.