The Ohio Lottery's much publicized game of keno fell far short of profit projects in first full year of operation, raising new questions about Governor Ted Strickland's plan to install slot machines to support the state budget. According to the lottery figures released on August 14th, 2009, keno, a fast-playing numbers game at bars and restaurants around the Ohio, earned a total of $30 million for Ohio schools in its first full year of operation, which ended July 31st.
Governor Strickland's administration had projected a yearly profit of $73 million when the Governor launched the game in early 2008 as a way to avoid substantial cuts in education funding. Now, Governor Strickland and the Ohio legislature are moving forward with plans to install up to 17,500 slot machines at state racing tracks to avoid a budget meltdown. Ohio is anticipating a total of $933 million from slot machines in the next two years, with half of that from licensing costs.
Representative Jay Hottinger, a Newark Republican and lottery critic said that Governor Strickland have missed their predictions with keno. He added that it is possible that Governor Strickland's $933 million prediction on slots earnings will also miss. Hottinger said that it will affect public education if they are not correct with their prediction.
Strickland spokesperson Amanda Wurst stated that keno's questionable numbers are not a harbinger of what will happen with slot machines. Wurst said that estimates of the administration took into account the financial crisis and are based on slot machine performance in neighboring states like Indiana and Pennsylvania. Although lottery earnings are allocated for public education by law, Strickland has stated that the state's cut of video lottery terminal profits will go toward the balancing of the budget.
The slot machine revenue is to go into the public education budget, while a similar amount will be taken from the education budget for other purposes. Todd Anderson, the president of the central Ohio chapter of the Ohio Licensed Beverage Association, a trade group of bars in Ohio, said that the game of keno has been a victim of the recession but that does not make it a complete failure.
Anderson said that with the condition of economy, people have less discretionary money to spend on games like keno. He said that he thinks that the game only needs more advertising and education to teach players how to play the game. Anderson added that from the perspective of their members, it is not a complete failure since the state have an additional source of revenue.
Governor Strickland's administration is hoping to have the bulk of the machines running by May 2010. Each racing track would get as many as 2,500 slot machines. Anyone 18 or older could play. The minimum age requirement for other lottery games also is 18. Most states, including Indiana and Michigan, set the minimum gambling age at 21 years old.
Some critics of Gov. Strickland's plan say that Ohio's proposed minimum could result in people becoming addicted at a very young age. Ohio's slot machines would return eighty-five percent of money wagered in the form of winnings.
Most slot machines in other states pay out 90% to 95% of money wagered. Officials said that Ohio's payout percentage is similar to that other lottery games like scratch-off tickets.
[08-09]
John M. Thorpe
