Keno Pause Opens New Fight Over Lottery (Andrew DeMillo Analysis)

by Associated Press  on Sunday, Jul. 6, 2014 12:36 pm  

LITTLE ROCK — Arkansas lottery officials won't just be making the case for why they should be allowed to expand their games to include offerings such as keno when the Legislature meets next year. They'll also be making the case for not completely overhauling their structure.

Legislation approved in a special session last week that bars the lottery from launching monitor games such as keno until March 13, 2015, ensures that the issue will be at the top of the agenda when lawmakers convene for next year's session.

It also sets the stage for a new fight over the setup and future of a lottery that has had a shaky relationship with the Legislature since voters approved the games to fund college scholarships nearly six years ago.

Sen. Jimmy Hickey, who had proposed banning keno outright, agreed to scale back his proposal to impose a moratorium that lawmakers could revisit next year. Shortly before the measure received final approval early Wednesday, Hickey said he's also taking a look at the law that set up the Lottery Commission and the overall structure of the games.

"This is going to give time to study any and every aspect within that (lottery) bill," said Hickey, R-Texarkana.

Hickey and Senate leaders had been pushing for the ban as part of the call for last week's special legislative session, arguing that voters didn't envision keno when they approved the constitutional amendment for the lottery in 2008. But Hickey faced resistance from House leaders, who had opposed the idea of taking up the matter in the special session but agreed to the moratorium.

The keno moratorium offered a victory for some strange political bedfellows: opponents of gambling such as the Family Council — which campaigned against the lottery — and the state's existing gambling interests such as Oaklawn Park.

The Arkansas Lottery Commission this year approved launching keno, a bingo-style game that would have draws every six minutes, which players would track on monitors. The lottery projected it would sell $12.5 million worth of tickets for the monitor games, which would create $3.8 million in revenue for college scholarships.

The interest in keno comes as the lottery has been suffering from declining revenues, and lottery officials say the monitor games could bring in new players who don't normally buy lottery tickets. But by voting to start the games a day after a legislative oversight committee passed a resolution of "non-support," lottery officials ensured a showdown with lawmakers.

It won't be the first showdown over the games. Even before the lottery started selling its first tickets in 2009, efforts to scale back the games and have more legislative control over its organization have been a hallmark of legislative sessions.

The lottery's original director, Ernie Passailaigue, resigned in 2011 after weathering criticism over a critical state audit and his $324,000 salary. His two top deputies left soon afterward, with one resigning and one being fired. And fears about what declining revenues will mean for the scholarships funded by the games will also overshadow the session.

It's unclear how far Hickey will want to go with an overhaul, but he's already considering pushing for a major change to the law that set up the lottery and says he wants to look at what other states do.

Hickey told reporters he's considering proposing having the lottery be run by a state agency, such as the Department of Finance and Administration, rather than the current independent commission.

The moratorium also gives lottery officials time to make their case for expanding their offerings. Lottery Director Bishop Woosley said he planned to meet with lawmakers before next year's session to explain to them why lottery officials want to start the games.

"It is my job to try and find new sources of revenue. That's what I have to do," Woosley told reporters.

Andrew DeMillo has covered Arkansas government and politics for The Associated Press since 2005. Follow him on Twitter at @ADemillo.

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