Keno, one year later: A qualified success

Keno 603, launched in December 2017, has produced additional revenue for the state and boosted customer sales at those establishments offering the game, while avoiding some of the feared consequences of expanded gambling.

It also helped school districts across the state that offer full-day kindergarten, providing an additional $1,100 per student in state support.

That was the promise that helped garner support for the game, but first-year revenues amounted to only $11.7 million by the end of August, when the first payment was due to schools, and the net profit for the game was only $2.1 million. That meant that, to meet its obligation to public and charter schools, the state had to kick in nearly $8.7 million from its general fund.

Of course, the game had not operated for a full year at that point, and many of the establishments offering keno joined the program much later because towns or cities first had to agree to allow the game. In most cases, that meant a vote at Town Meeting in March, and that meant many games did not get underway in a majority of venues until April.

Now that a year has passed since the first game went live, the New Hampshire Lottery Commission provides a better sense of how successful the game is.

Keno 603 is now in more than 168 bars and restaurants in New Hampshire, including in Franklin and Laconia, Barnstead, Belmont, Center Harbor, Tilton, Northfield, and Alton Bay.

The game involves having players choose from one to 12 numbers out of 80 possibilities. A computer randomly generates 20 numbers every five minutes, and the more numbers a player matches, the higher the winnings.

Keno 603 retailers must pay a $500 annual licensing fee to have the machines, but the state provides the equipment and training to administer the game. Retailers receive 8 percent of the keno sales — the highest in the nation.

Yet there is a wrinkle on the horizon. On Tuesday, a legislative committee considered a House bill that would reduce that commission to 5 percent. Rep. Michael Cahill, D-Newmarket, has introduced House Bill 390, which would cut the commission to be in line with what the state provides for selling lottery tickets.

The House Ways and Means Committee has not made a recommendation on the bill and is looking for additional information. There is some concern that lowering the commission would lead some venues to pull out of the program.

It will not be an easy decision. Businesses selling the game report an increase in food and beverage sales of 15 to 20 percent. Cahill uses that figure to argue that the 3 percent reduction in commissions will not hurt the retailers.

Information from Maura McCann, the Lottery Commission’s marketing manager, shows that gross revenue from Keno 603 amounted to $8.3 million for the fiscal year ending July 1, 2018, resulting in sales commissions of $662,392. In the 29 weeks since then, keno brought in $13.4 million, with $1,082,504 in sales commissions to the retailers.

McCann said there are three applications from towns that have yet to approve sales of the game. Some communities had taken a wait-and-see posture to determine the success of the game (and potential problems) in the communities first getting on board.

“Interest in offering keno remains strong and we expect greater interest the closer we get to town meeting dates, when those communities vote to approve the sale of the game,” McCann said.

Another possible change is being proposed by David Watters, D-Dover, who sponsored the original keno legislation. Watters wants the state to make the support of full-time kindergarten part of its adequacy aid, and he would redirect the keno revenue toward the restoration of state school building aid.

New Hampshire provided aid to school districts doing renovations or building new schools up until 2009, when the legislature placed a two-year moratorium on the spending. That moratorium has since been extended, so the only building aid being provided is what had been previously approved.

Watters wants to see the state resume its support of building projects for school district, and he sees the keno revenue as the means to do that.

To contact Tom Caldwell, email tom@laconiadailysun.com.