HARRISBURG, Pa. — Efforts by Gov. Tom Corbett's administration to privatize the management of the Pennsylvania Lottery is on the back burner, but the idea of expanding lottery games to include keno remains very much in the picture.
Revenue Secretary Dan Meuser and top lottery officials testified last week before the Senate Finance Committee on how keno is part of a developing strategy to increase lottery revenue to meet growing demand for the senior citizen benefits it underwrites. The catalyst for action, as with the spike in public pension costs, is the aging of the post World War II baby boomer generation.
Lottery programs will face a shortfall without a revenue infusion as more baby boomers retire, said Sen. Michael Brubaker, R-Lititz, the panel chairman.
The ultimate goal is to get more people, especially young adults in their 20s and 30s, to play lottery games a little more often, state Revenue Secretary Dan Meuser said.
Keno is seen as attractive to that demographic, Meuser said. Keno is similar to the lottery's Match 6 lotto game, but is drawn more frequently.
"The lottery believes keno proposes significant opportunity to attract new, non-traditional retailers like restaurants and bars into the lottery network, but how taverns and players may embrace keno has yet to be determined, as does the competitive impact tavern small games of chance may have on keno's appeal to retailers and players," he said. "Given that caveat, the lottery believes keno could generate somewhere between $40 million and $180 million in additional profit each year, as it is phased in over a number of years."
The idea is to have keno at 1,000 retailers during the first year with about half that number being retailers who are already part of the Lottery network, Meuser said.
Keno will be debated as taverns apply for small games licenses under the law enacted last November and a legislative agency conducts a study on how to make the casino industry more competitive, potentially by adding online gambling.
All this activity led Sen. Matt Smith, D-Mount Lebanon, to raise the prospect of a "gaming creep mentality" under way in Pennsylvania.
Keno will do better if lawmakers allow the lottery to operate with a lower profit margin, Meuser said.
Popular games that have a higher payout percentage deliver a lower profit margin.