The Kentucky Lottery Corp. has shelved its plan to start fast-paced keno gambling after the game was criticized by Gov.-elect Ernie Fletcher, lottery President Arch Gleason said yesterday.
Gleason told legislators that he and lottery board Chairman Bill Covington agreed that implementing the game wasn't feasible after Fletcher issued a strongly worded statement on Friday opposing its introduction.
"It's pretty clear to me there's not the public policy support for us doing the game," Gleason told reporters yesterday after speaking to the interim Committee on State Government. "Governor-elect Fletcher's statement caused the change."
Fletcher, who takes office Dec. 9, said last week that he believed that starting keno a rapid electronic numbers game would violate the state constitution and should not be added without popular support.
Wes Irvin, a spokesman for Fletcher, told reporters that Fletcher was "very pleased" with the decision.
The Rev. Nancy Jo Kemper, executive director of the Kentucky Council of Churches and a critic of keno, also said she was pleased. She called keno "the most atrocious form" of gambling that preys on the poor.
Gleason's announcement came 10 days after the lottery board voted 6-1 to authorize the lottery staff to begin a keno game as soon as possible. He said the board may rescind that decision at its January meeting or may take no action, since its vote was not an order.
Although not all board members have been consulted on the plan to stop development of the game, Gleason said he didn't anticipate the board having a problem with the decision not to proceed. "The issue is moot at this point," he said.
Keno has had a controversial history in Kentucky. It differs from traditional lottery numbers games because keno numbers would be drawn as often as every five minutes compared with once or twice a day for other games.
The Kentucky Lottery Corp. tried to institute keno soon after the lottery was created in 1989 but backed off when opposition arose from lawmakers and then-Gov. Wallace Wilkinson.
In 1999 Attorney General Ben Chandler issued an opinion that suggested that keno can only be instituted through passage of a constitutional amendment because it is so different from other lottery games.
The issue remained dormant until Gov. Paul Patton, with just weeks to go in his term, earlier this month urged the lottery board to start a keno game. Patton said the lottery board had the authority to start the game, and that the lottery needed to generate more revenue in the face of next year's expected launch of a lottery in Tennessee.
Gleason said yesterday that the Kentucky lottery stands to lose as much as $75 million in proceeds once the Tennessee lottery is fully operational, and that includes about $20 million turned back to the state that is mostly used for college scholarships.
Keno could generate between $22 million and $35 million a year, lottery officials have said.
Several lawmakers yesterday praised the decision to back away from keno. Sen. Charlie Borders, R-Russell, said the lottery board's vote to take Patton's advice was "inappropriate."
"From an operational standpoint it would be an absolute mess," said Rep. Paul Marcotte, R-Union.
Marcotte said he was concerned that convenience stores would attract gamblers who would loiter, waiting for numbers to be drawn.
Gleason said that in many states where keno is legal, convenience stores often don't participate in the games for that reason, and that about 70 percent of keno sales come at places like restaurants, bars and bowling alleys.
Rep. Larry Clark, D-Okolona, said he believed the lottery would increase revenues if it could advertise that the state uses the bulk of lottery profits for scholarships.
Rep. Tanya Pullin, D-South Shore, said she has prefiled legislation for the 2004 General Assembly giving the lottery the authority to advertise how its money is used.
Gleason said the benefit of such advertising is hard to measure, but he said that other states that allow such ads estimate that they account for about 3 percent to 5 percent of total sales.
A legislative study found that in 2005-06 lottery revenues will fall $3.3 million short of fully funding the merit-based Kentucky Educational Excellence Scholarships. That program allows students to earn up to $2,500 a year for four years of college based upon their high school grades and their scores on a college entrance exam.
The program has been popular with legislators and with parents facing the rising cost of sending their children to college. But Kemper yesterday called it a "middle-class entitlement funded on the backs of the poor" and said the scholarship program should be funded with general-fund revenue.
The lottery also funds two needs-based college aid programs, the Kentucky Tuition Grant and the College Access Program, for low-income students.
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