Still a loser

August 24, 1993

Any way you cut it, the keno lottery game remains a losing proposition.

The long odds on this game of chance make it nearly a sure bet that the vast majority of those who wager their money in Maryland will lose. And the fast-paced nature of this gambling game -- every 5 minutes for 18 hours a day -- ensures that those addicted to gambling will play often and lose heavily.

Now the state, too, is ending up facing a big loss. Revenue from the keno lottery game fell a whopping 43 percent below expectations for the first six months of operation. This lackluster result came despite the fact that 2,052 retail businesses now offer keno -- 252 more than lottery officials had predicted by July 1.

If keno were a private business concern, that kind of poor revenue showing would be a major calamity. As it is, state officials find themselves with $21.6 million less than they expected, money they had hoped to put to good use.

Worse, the Schaefer administration is counting on an inflated $100 million in profits from keno in the current fiscal year. Assuming keno sales don't fall further, that estimate will be off by $43 million.

Compounding the problem is that keno hurts other lottery games. This cannibalization ends up costing the state even more revenue.

As keno's newness continues to wear off, and as the number of potential new retail locations dwindles, there is also the likelihood that usage will decline over the next few years. That spells even more problems down the road.

A few outlets are benefiting tremendously from the initiation of keno. The Purple Moose bar in Ocean City, for instance, has tripled its sales since January. A liquor store in Hagerstown is selling 20,000 to 25,000 tickets a week and claims the game is drawing in new customers.

Yet overall, keno has been a bad bet by the state.

It is an addictive game. It has disappointed its promoters within state government. And there still is a court challenge to the legality of the game pending in the Worcester County Circuit Court. From all vantage points, keno is a loser. This debacle should teach state officials an important lesson: lottery games are not a stable source of revenue.

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