🔒Keno is becoming CT Lotto’s ace in the hole

Bridgeport’s Daybreak Doughnuts is known to customers for its sweet breakfast treats. It’s also known to the Connecticut Lottery Corp. (CLC) as a top-tier revenue producer.

The 27-year-old Madison Avenue business, which opens early and closes late, posted just shy of $973,000 in Keno sales last year, making it the second-largest Keno retailer in Connecticut. With 5% commission plus bonuses, Daybreak Doughnuts’ take is nothing to scoff at, especially for a small business.

Restaurant owner Tommy DeLaurentis said Keno has become a big seller at his shop, along with ever-popular scratch tickets, providing extra revenues as well as new customers.

“Of course it’s good for us,” DeLaurentis said. “Guys want to play it all day and drink their coffees in the corner.”

Daybreak Doughnuts’ Keno success mirrors the cash windfall the game has also provided the Connecticut Lottery Corp.

Since becoming legalized in 2016, the bingo-like game has recorded annual double-digit percentage revenue growth, and recently became the lottery’s second-highest-grossing individual game, surpassing Powerball last year, officials said.

That’s also good news for the state budget, which gets roughly 28% of the Lottery’s annual revenues.

In fiscal year 2019, Keno generated $102.9 million in sales, accounting for nearly 8% of the Lottery’s record-breaking $1.33 billion in overall revenue.

Keno’s success has also provided a confidence boost as lottery officials seek out new games, including online lottery sales, which they will be pursuing again this legislative session.

Lottery CEO Gregory Smith said he’s been pleased with Keno’s performance so far, but also sees room for more growth.

“Keno’s growth has been a positive outcome for us, but we’ve had great expectations for the game,” said Smith, who was hired for the job in mid-2018. “And its continued double-digit growth tells us we don’t quite see the peak yet.”

Smith sees more runway for Keno because the lottery is steadily implementing new ways to sell it.

That includes modernizing its long-standing scratch-ticket vending machines. The lottery replaced 200 machines last year with new models that can sell draw games and Keno.

Smith’s team is also recruiting more businesses to become lottery retailers, specifically targeting social clubs, restaurants and bars because patrons generally spend more time at those locations. Overall, the Connecticut Lottery counts 221 such establishments on its roster of 2,900 lottery retailers.

The lottery is also steadily adding dedicated Keno TV monitors, which are bigger sales-growth catalysts than vending machines, to locations with promising revenue numbers, Smith said.

An explainer

To play Keno, bettors fill out a slip, indicating the number of games they want to play and the amount to be wagered per game (between $1 and $20). They also choose how many numbers or “spots” (between one and 10) they want to try to hit out of a possible 80.

Every four minutes, the lottery’s system randomly selects 20 numbers, which are displayed on Keno monitors and the lottery website. Bettors can win depending on how many of their numbers match those on the screen.

The maximum possible Keno payout is $1 million. That number hasn’t been hit yet. The largest single prize so far was $200,000, won in Groton.

Daybreak Doughnuts’ DeLaurentis said he sees his Keno sales growing further this year.

The only challenge with selling so much lottery, he said, is that his employees must juggle their various duties while serving customers playing the game.

“The biggest problem is balancing it,” he said.

Besting Daybreak in Keno sales last year was the Loyal Order of Moose Lodge 289 in Stratford, which posted a stunning $1.1 million in sales, according to data provided by Connecticut Lottery.

Moose Lodge operators did not respond to requests for comment, but according to the 300-member organization’s nonprofit tax filings, it recorded nearly $143,000 in member gaming revenue in fiscal year 2018.

On the horizon

While future Keno growth looks promising, the Connecticut Lottery is on the hunt for new game opportunities.

The quasi-public agency’s lobbyists will again pursue the legalization of online lottery sales (known as “ilotto”) this legislative session, and its odds of convincing lawmakers may be as good as they’ve ever been.

Democratic leaders have already signaled a strong push for sports betting and various other gambling expansions this session and Gov. Ned Lamont has included online lottery sales in his revised fiscal 2021 budget in order to help defray the cost of a debt-free community college program. Online lotto sales are projected to grow to $18.6 million by 2025, Lamont’s budget said.

Connecticut Lottery is also getting ready to launch a new game called Fast Play, which prints scratch-like instant tickets that don’t need to be scratched to reveal the numbers.

Smith wasn’t ready to say much about the game, and couldn’t provide a revenue projection, but he is generally optimistic.

“This has got a potentially good upside, we’ll be one of the 20 U.S. lotteries that are offering it,” he said. “I don’t think it has the same revenue potential as Keno, … but it could also be a nice growth developer and something to attract attention for new players.”

In Pennsylvania, the first full year of selling Fast Play in fiscal 2018 brought in $114 million in sales revenue, according to the game’s provider, Scientific Games.

As expanded gaming possibilities swirl, Diana Goode, executive director of the Connecticut Council on Problem Gambling, says lawmakers should ensure there’s enough funding to help those who need it. The help line run by the council has seen an increase in calls this past year, Goode said, but it’s tough to pinpoint the exact reasons for that.

“I think that gambling is a ball rolling down a hill — it’s going to go,” said Goode, whose organization doesn’t take any formal pro or anti-gambling stance on bills in the Capitol. “You can get in front of it and get crushed, or you can make sure it doesn’t crush anyone.”