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Michigan draws number of Ohio customers who want to play; game plans here remain at standstill
By Dennis J. Willard
Beacon Journal Columbus Bureau
Published on Sunday, Mar 30, 2008
It's early afternoon on a Friday at M.T. Loonies, a sports bar and restaurant in Temperance , Mich., two miles north of the Ohio border.
Trixi Schmidt, a 37-year-old bartender, is on the phone as Guns N' Roses blares Sweet Child o' Mine in the background.
''Club Keno? Oh, it's our bread and butter. When I got hired, they told me keno comes before drinks, keno comes before food.''
Schmidt pauses the conversation to wait on a customer placing a wager. Her job is to mix drinks and take Club Keno orders.
M.T. Loonies has two keno terminals, one self-serve, and nine monitors for customers to view the drawings that run nonstop, seven days a week every four minutes beginning at 6:05 a.m., with the last drawing at 1:45 a.m.
To play Club Keno in Michigan, the bettor needs a playlist that looks a little like a voting punch card with pink lettering and numbers.
Gamblers can pick up to 10 numbers between 1 and 80 or let the computer select numbers for them. Wagers start at $1 and go as high as $20 per drawing, and gamblers can place their slips into play for up to 20 drawings at a time.
The maximum prize is $2 million for a $20 wager.
At M.T. Loonies, gamblers fill out the slips, enter them into the self-serve terminal or through a server at the other terminal, and then wait for the next statewide drawing results to appear on one of the monitors.
Ohio Gov. Ted Strickland announced in early February that he was going to expand games offered by the Ohio Lottery Commission to include electronic keno.
The idea was floated — as so many other expansions of the lottery in Ohio — as a way to ensure funding for education in light of a projected $733 million shortfall.
The lottery commission was prepared to ask the State Controlling Board for permission to award an unbid contract for $18 million to GTech Corp. for keno machines, maintenance and gaming contracts, but the plan to have the new offerings up and running by July 1 hit a snag.
Lawmaker opposition
Republican lawmakers, even some who support the idea, want questions answered, and it appeared the controlling board would not endorse Strickland's request, so the governor pulled the item. Senate President Bill Harris, R-Ashland, has indicated he would like a state legislative oversight panel, the Joint Committee on Agency Rule Review, to hold a hearing on keno before releasing any funds.
There is outright opposition in the legislature, too.
A number of lawmakers, led by state Sen. Ron Amstutz, R-Wooster, and state Rep. John Adams, R-Sidney, want to kill keno before it begins, and each lawmaker has introduced legislation to restrict the number of statewide drawings each day.
Amstutz said the idea would be to limit online drawings, which would in effect deter keno, because the game is dependent on nonstop action from sunrise to well after midnight.
Huge draw for customers
Aaron Moshier, a 21-year-old server at M.T. Loonies, said the tavern does a good business in food and drink, and a pool league fills the place with players in the evenings and on weekends.
But keno is the huge draw, especially during the day.
''We have regulars who come in on a daily basis to play,'' Moshier said.
At times, he waits on tables where customers have a drink or some food and fill out tickets for him to enter into the terminal, or he works at the terminal, where people line up to place their wagers.
''People prefer to use the keno station operated by someone like me. They can ask questions,'' Moshier said.
He said a large number of customers come from Ohio to play keno.
''We are a bar that offers smoking and your state bans smoking in bars, so people come here to drink, smoke, eat and play keno,'' Moshier said. ''I think it's great that Ohio is going to get Club Keno. It will help the state out a lot and the establishments that get it.''
How it would work
Marie Kilbane, an Ohio Lottery spokeswoman, said Ohio's keno would work much in the same way as Michigan's.
In an age-controlled environment, such as a bar or restaurant, players would wager on a game and have their bet run through a terminal by an employee at the authorized lottery outlet, she said.
Kilbane said retailers that already offer lottery games in Ohio would be first in line for keno.
''If you play keno in Ohio, you would play against a pool of players across the state,'' Kilbane said.
There would be a cutoff point for wagering on a game, and then the player's bet would go into the next drawing, Kilbane said.
Under Strickland's plan, any bar or restaurant that holds a valid Class D liquor permit for on-site consumption would be eligible to install a standard keno setup beginning July 1.
The keno machine, which resembles a widescreen computer monitor, would sit alongside the current standard setup for a lottery commission outlet, which includes a terminal that sells tickets for Pick 3, Pick 4, Rolling Cash 5, Classic Lotto, Mega Millions, Kicker and Ten-Oh!, plus a printer and a validator.
Growth of the game
When Strickland unveiled the keno plan in February, he projected first-year gross sales of $292 million and profits of $73 million.
The governor did not talk about the growth of the game.
According to Ohio lottery documents, the agency planned to spend $9.4 million to launch keno in the first year and an additional $18 million in the second year for terminals, verifiers, satellite dishes, wireless connections, monitors, vehicles and other equipment.
The cost would double in the second year as new employees would be brought online, including 25 lottery sales representatives, three administrators and five security workers. GTech would also receive $5.2 million in commissions in the second year.
Michigan has had Club Keno since October 2003.
Alyson Kechkaylo, a Michigan lottery spokeswoman, said gross sales for Club Keno have increased each year.
In the first year, gross receipts were $204 million, but the figure has more than doubled to $491 million in the fiscal year that ended in October 2007.
Today, one in every five dollars wagered on the Michigan lottery is for Club Keno. The state, like Ohio, is also part of the Mega Millions multistate drawing.
Instant tickets and daily pick four and five drawings bring in about the same amount of money in gross sales each year in Michigan and represent about 61 percent of the state's totals.
Instant vs. other games
In Ohio, instant sales overshadow other games.
Instant sales, mainly scratch-off games, brought in $1.3 billion in the fiscal year that ended June 30, compared to $905 million in lottery drawings.
Sales were up for scratch-off games from the previous fiscal year, when the lottery took in $1.27 billion, while sales in drawings continued to decline, dropping from $946 million.
So far this fiscal year, which began July 1 and runs through June 30, the lottery has brought in $920 million in instant sales, or 59 percent of its gross receipts, compared to $636 million, or 41 percent, in other games.
Kechkaylo said two horse racing tracks in Michigan have Club Keno.
Track owners in Ohio have pushed for years to install electronic lottery games to build purses and re-energize the racing industry.
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
It's early afternoon on a Friday at M.T. Loonies, a sports bar and restaurant in Temperance , Mich., two miles north of the Ohio border.
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Posted 04:35 AM, 10/28/2008
While Ohio Governor Ted Strickland confirmed no sign of fallback on his opposition to the payday loan and cash advance industries, he has found a new friend that he’s fighting on behalf of: the state’s community of gamblers. In effect, as of August 1, 2008, but being contested by the people on the November 4 state ballot, Strickland says this is a valiant effort to raise money for their public schools. Although he has been taking deep criticism from all walks of life, including members of his own parish, Strickland has defended his views on several occasions, claiming that, despite his opposition to the expansion of gaming, this one is best for the common good of our children. Modification of the state constitution to authorize the construction of a $600 million casino near Dayton is part of his proposal. Really think about this idea for just a second. If I’m not mistaken, Governor Strickland is instructing his citizens to take a chance and gamble away whatever's left in their pockets if they are experiencing an unexpected financial sting. Along with that, it is being toted as a good cause for children’s future. When they are short on funds to purchase their children’s clothes and school supplies, Strickland says it is NOT okay to get temporary funds from a payday cash lender to make ends meet.
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