June 1, 2009

Governor Rell Proposes Introduction of Potentially Dangerous Electronic Gambling Across Connecticut Communities Without Adequate Study and Citizen Input and With Reduction of Services for Problem Gambling

Reasons why introduction of keno, an ELECTRONIC form of gambling, in Connecticut communities is born of desperate thinking and is likely to create more problems than it solves:

1. WIDESPREAD ELECTRONIC FORMS OF GAMBLING ENDANGER COMMUNITIES
In 1999, the federal government published the results of comprehensive investigations by the National Gambling Impact Study Commission (NGISC). One of the recommendations of this federal Commission was a moratorium on electronic forms of gambling (convenience gambling) due to reports of increased problem and underage gambling after wide dissemination in some states. No research findings since 1999 have alleviated the safety concerns related to electronic gambling when integrated into community businesses. Therefore, legalizing electronic keno in Connecticut without research into its addictive potential, without debate within legislative committees, and without an open hearing, including expert testimony, is not a responsible course for the governor or legislature to take.

2. ELECTRONIC FORMS OF GAMBLING WITHIN COMMUNITY SETTINGS OPENS THE DOOR TO OTHER FORMS OF ELECTRONIC GAMBLING
There is evidence from other states that when keno gets a foothold in a state lottery, other electronic games follow, e.g., Massachusetts expanded keno to include a Daily Race Game.

3. ELECTRONIC FORMS OF GAMBLING WITHIN COMMUNITY SETTINGS CAN LEAD TO INTRUSIVE MARKETING
Lotteries have sometimes made broader incursions into communities through keno. For example, the Ohio lottery is currently using flashy ads to encourage community groups to have keno parties.

4. PROPOSED KENO AND PLANNED RE-INTRODUCTION OF LOTTERY VENDING MACHINES WILL INCREASE GAMBLING AND GAMBLING PROBLEMS AMONG YOUTH

KENO
The Massachusetts Attorney General's Consumer Protection and Antitrust Division conducted a statewide study of illegal sales of keno tickets to underage youth. Of the 166 times 14 underage teenagers attempted to purchase tickets, they were successful 66% of the time. Also in Massachusetts, children may be observed participating with their parents as they gamble in keno while dining in family restaurants.

INSTANT LOTTERY TICKET VENDING MACHINES (ILTVM)
In 1999, the Connecticut Lottery Corporation (CLC) removed all ILTVMs from community settings, in part because these machines increased availability of lottery tickets to minors. However, in the state's desperation to deal with the current huge budget deficit, the CLC is now planning to return to selling lottery tickets from vending machines despite the strong evidence that even without vending machines, a high percentage of youth in Connecticut and other states purchase lottery tickets themselves. Connecticut studies have found that up to 35% of high school students report having purchased lottery tickets themselves directly from clerks and cashiers. In addition, another Massachusetts Attorney General's field study utilized twenty-one minors, ages 9 through 17, who attempted to purchase lottery tickets directly from employees in supermarkets and convenience stores in 20 cities and towns across Massachusetts. In 153 attempts, tickets were successfully purchased 80% of the time.

STATE LAW INDIRECTLY ENCOURAGES MINORS TO GAMBLE AND ILTVMs ARE COUNTERPRODUCTIVE TO THE CLC'S POSITIVE EDUCATIONAL EFFORTS
The CLC has increased efforts to try to reduce gambling by minors, including: educating retailers and providing signage at the point of sale stating that it is illegal to sell tickets to anyone under 18. In addition, the CLC has collaborated in the Partnership for Responsible Gambling to produce public service announcements for TV. Unfortunately, the return to ILTVMs is contrary to these positive efforts.

The existing state law that legalizes adults giving lottery tickets as gifts to minors undermines the state's credibility with regard to preventing youth gambling. When minors are given lottery tickets, they are psychologically and emotionally in the process of gambling as they scratch instant tickets or wait to see if their numbers are winners. This law does more to encourage minors to gamble than any efforts by the state to discourage youth gambling.

5. LEGALIZING KENO MAY VIOLATE THE COMPACT
Both Connecticut casinos operate keno, which traditionally had been played only in casinos. Legalizing keno and operating it through the lottery may violate the state's compact with the Mashantucket Pequot and Mohegan Tribes. In the compact, keno is a class III (casino) game which the tribes appear to have exclusive right to operate. Since the compact prohibits the CLC from introducing a lottery game that would violate the compact and keno is considered a casino game under the compact, it appears that the state would violate the compact if the CLC introduced a keno game.

Helpful in clarifying this issue is the Research Report entitled "Keno and Tribal - State Agreements" by the Office of Legislative Research in Connecticut, which describes the different legal and legislative rationales utilized by different states concerning whether keno should be legalized and/or whether it is a form of gambling that could be operated by the lottery (/www.cga.ct.gov/2008/rpt/2008-R-0441.htm). As discussed in the Report, in some states, rulings by the attorney general and/or the courts have been needed to resolve this controversial issue.

*This is not offered as a legal opinion, but has been presented to support the legislative request for a ruling by Attorney General Blumenthal. The CCPG does not take a position concerning whether gambling should be legalized and is neither pro nor anti gambling. The CCPG does advocate for legislation, programs and research that will lead to the prevention of problem and underage gambling and that will assist problem gamblers and their families. As in the case of keno and ILTVMs, the CCPG also advocates against legislation and programs that will increase underage and problem gambling.

6. DURING A SEVERE RECESSION IS NOT THE TIME TO EXPAND GAMBLING
It is unrealistic in the midst of a deep recession, where jobs, benefits and pensions are reduced or lost, to expect that people would want to spend even more of their money on gambling than they had been spending. There is very little discretionary money available to families after necessities are paid. People who are severely stressed financially are especially vulnerable to the possibility of relieving their burden through gambling, especially if gambling is highly advertised and available in businesses in their community.

7. GOVERNOR UNCONCERNED ABOUT FINDINGS OF EXPENSIVE STATE FUNDED STUDY
Governor Rell proposed a significant expansion of gambling prior to reviewing the state sponsored study that used $700,000 of public funds to research "the effects of legalized gambling on the citizens of CT". This study was completed in early 2009 and the results have not yet been released. Why did the state do the study if it isn't going to be guided by the results? It is irresponsible of public officials to not wait until the results of the study are disseminated and digested before proposing the expansion of gambling!

8. INCREASE FUNDING FOR PROBLEM GAMBLING PROGRAMS
When gambling is expanded, accessibility and availability increase, more people gamble, and problem gambling also increases. Introduction of electronic keno would place the burden on those who already spend the most money gambling. It is in this group of heavy recreational gamblers that problem gamblers are primarily found. Each problem gambler is responsible for approximately five times more revenue than each non-problem gambler. Therefore, the introduction of keno would result in exacerbation of the gambling problem for those who are already suffering from this bona fide mental disorder.

IT IS EXTREMELY IRRESPONSIBLE NOT TO HAVE ATTACHED A MECHANISM TO PROVIDE FUNDS FROM KENO REVENUE FOR PROBLEM GAMBLING TREATMENT, PREVENTION AND RESEARCH TO THE PROPOSAL INTRODUCING ELECTRONIC KENO. IN FACT, NOT ONLY HAS NEW FUNDING NOT BEEN PROPOSED, BUT THE GOVERNOR HAS CUT $200,000 IN THE FY 2009-2010 BUDGET FROM THE CURRENT FUNDING FOR STATE PROBLEM GAMBLING SERVICES!

For more information, please contact Dr. Marvin Steinberg, Executive Director, CT Council on Problem Gambling at (203) 453-0138 or marvins@ccpg.org