Patton proposes Keno to raise funds for scholarships

Nov 13, 2003, 5:07 am (Post a comment)

Kentucky Lottery

Kentucky Gov. Paul Patton has urged the state lottery to launch a Keno game to raise more money for college scholarships, and lottery officials will discuss the proposal tomorrow.

Patton made the suggestion in a Tuesday letter that was released by his office yesterday. The letter went to Bill Covington, the board chairman at the Kentucky Lottery Corp.

Patton noted in the letter that a recent legislative study found that lottery revenue in coming years won't be enough to fully fund the state's merit- and need-based scholarship programs, and he said the onset of the Tennessee lottery next year will make it even harder to fully fund the scholarships.

"We in the executive branch have an obligation to generate all the revenue we are legally empowered to generate in support of programs we are mandated to provide to our citizens," Patton said in the letter.

Reaction to Patton's letter was mixed.

"Keno and other limited expansions of gambling should be considered, and anybody who's against it should come up with another idea," said Sen. Tim Shaughnessy, D-Louisville, who sponsored legislation creating the state's three lottery-funded scholarship programs. "In my opinion, cutting back those programs is not an option. That's just a failure of leadership."

But Senate President David Williams, R-Burkesville, said, "I believe it would be a mistake for the lottery board to follow the advice of an outgoing governor."

The Rev. Nancy Jo Kemper, director of the Kentucky Council of Churches, agreed.

"I've never heard of anyone being able to gamble their way out of a financial problem," Kemper said. "I think this is gambling with people's future ... and it's far too hasty to be made in the jet wake of a departing governor."

Gov.-elect Ernie Fletcher will succeed Patton on Dec. 9.

Wes Irvin, a spokesman for Fletcher, said yesterday that Fletcher "will certainly evaluate" Keno as an option to increase revenue but added there are "concerns." Irvin declined to say what those concerns are but said the issue needs more study.

At an impromptu news conference yesterday, Patton said he didn't write the letter earlier because he didn't want to interfere with the race for governor.

Lottery spokesman Chip Polston said Covington, in response to Patton's letter, asked the lottery staff to present the board with Keno gaming options at its meeting tomorrow. He said 12 of 36 states with lotteries have some form of Keno.

House Speaker Jody Richards, D-Bowling Green, said yesterday that he's against starting a Keno game to cover a potential shortfall in college scholarship programs and that he prefers trying to find the money elsewhere through "a revenue stream that is more dependable."

Richards also said he doesn't believe that the lottery can offer Keno without legislative approval and that the board has pledged to seek such approval before starting Keno.

But Polston said the lottery board believes it can launch Keno under existing law. And he said the board didn't agree to seek legislative approval before starting Keno, but rather said it would get the opinion of Frankfort policymakers before doing so.

"We consider the letter from the governor to be that type of guidance," Polston said.

The Kentucky lottery first considered a Keno game in 1990 but killed the proposal over fear that it would too closely resemble casino-style gambling. That game would have used a computer to generate 20 random numbers between 1 and 80 every 15 minutes for 181/2 hours daily. Players could bet from $1 to $100 on a single play, trying to match from one to 10 of the 20 numbers selected by the computer. Prizes would have ranged up to $1 million.

"There are multiple prize structures," Polston said. "Your prize depends on how many numbers you picked and how many of them match the winning numbers." He also said some states draw numbers twice a day, and some draw numbers every few minutes.

Polston said the lottery has routinely studied Keno and other games, and in January found that, based on the 2002 lottery revenues, adding Keno would increase sales by $95 million to $125 million a year. Of that amount, between $29 million and $38 million would go toward the college scholarships.

The Tennessee lottery, which is expected to sell its first ticket Feb. 10, is expected to cost the Kentucky lottery up to $75 million in sales, or about $20 million in lost revenue to the state, Polston said.

A legislative study released last week found that by 2005-06, the lottery will fall $3.3 million short of being able to fund the Kentucky Educational Excellence Scholarship program, in which students can earn up to $2,500 for each of four years of college based on their high school grade-point average and college entrance exam score.

Rep. Mike Cherry, D-Princeton, has prefiled legislation requiring the General Assembly to make up any shortfall in the program with General Fund revenues.

The legislative study also found that up to 61,000 low-income students qualify for $70 million in need-based aid each year under the College Access Program and the Kentucky Tuition Grant but didn't get the money. But the study said only about half of those students would use the aid if it was available.


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