Keno sales turn soft, fall below projections Is the novelty of the game wearing off?

March 11, 1993|By Eric Siegel | Eric Siegel,Staff Writer

Keno sales, which skyrocketed in the first month, are tailing off.

February sales of the controversial bingo-like game totaled $17.1 million, or about 12 percent below the Maryland State Lottery Agency's projections for the month of $19.4 million, lottery figures show.

The soft February keno sales contrast markedly with those in January when sales of $14.5 million were 45 percent above projections of $10 million for the month.

Projections for February were much greater than for January because of the increasing number of keno outlets. The electronic game began Jan. 4 with approximately 600 bars, restaurants and bowling alleys across the state offering keno; as of the end of February, the state had 841 outlets. By June, the lottery agency hopes to have 1,800 outlets on line, generating sales of $35 million that month.

After a first-week spurt of $3.3 million, nearly double the projections, weekly keno sales rose to $4.3 million by Feb. 7, an increase of $1 million. But in the four weeks since then, they have grown to only $4.5 million, a gain of about $200,000.

Because of the January surge, overall keno sales of $31.6 million for the first two months are ahead of the lottery's projections of $29.4 million by about 7 percent. Keno sales for the first week in March were $4.5 million -- the highest weekly figure registered. But they were still below the pace needed to meet the lottery agency's projection of total March lottery sales of $25.2 million.

The State Lottery Agency blamed the slowdown in growth of sales on a combination of factors. It said concern about whether the General Assembly would kill keno has hurt recruitment of new outlets, while bad weather has kept players away.

"We are confident that we have the potential to make up the slowed-up difference in the last four months of the fiscal year and we are especially pleased that all other lottery games have continued to hold their own in sales volume," the agency said in a written statement.

Lottery officials have predicted that the state would receive $50 million from keno in the six months ending June 30, based on its share of sales of $155 million.

(Keno returns 56 cents to 58 cents on every dollar to the players. About 6 percent is paid to outlets for selling and cashing tickets, approximately 2 percent, to the company that operates the lottery, and the rest goes to the state. Lottery officials yesterday could not provide figures on the player payout to date).

Critics of keno have argued that keno revenue estimates are grossly inflated and said the state should not base its budget on them. They said the drop-off did not surprise them.

"We predicted it," said Sen. Howard A. Denis, R-Montgomery. "Clearly, the novelty is wearing off. It's just another alarm bell we should listen to."

"Like any new innovative game, people are drawn to it at first. But give them time to realize the horrendous odds against them, and most people are going to back away from it," added Sen. Bernie Fowler, D-Calvert.

Senators Denis and Fowler were among those who last week voted 31-12 in favor of a Senate bill to kill keno. However, subsequent action in the House has virtually assured that keno will survive at least until next year's session of the General Assembly. On Monday, the House defeated a move to bring the keno issue to the floor just days after a House committee killed four bills aimed at ending the game.

Outlets where keno sales have fallen include the Firehouse Tavern in Carney -- the state's top-seller in the first week with $24,000. Sales have dropped to about half that, according to owner Harry Cohen.

"I didn't expect sales to fall off this fast. But if this is where they level off, I'll be pleased," said Mr. Cohen.

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