Indian gambling interests are concerned that Gov. Arnold Schwarzenegger wants to bring back Keno, a popular bingo-like game banned 12 years ago for violating state gambling law.
According to a draft of the governor's lottery plan obtained by The Bee, Schwarzenegger would propose a state constitutional amendment that tribes say could override a California Supreme Court decision that outlawed the game.
"This attempts to walk right to the edge by trying to preserve the tribe's revenue" while expanding the lottery, said attorney Howard Dickstein, who represents the United Auburn tribe near Sacramento. "It's a bold and dramatic departure from the status quo."
Lottery Director Joan Borucki denied the state is trying to legalize Keno. She said the language is intended to allow the lottery to hand out fixed-prizes for lower-level jackpots in multistate games such as Mega Millions.
Keno was similar to the lottery's current "Hot Spot" game – players decide how many numbers to bet with drawings held every few minutes. But Keno offered more lucrative fixed prizes rather than pari-mutuel prizes determined by the number of players.
Under Schwarzenegger's plan, which would require approval from the Legislature and voters, modernizing the lottery would complement his proposal to fill part of the state's $15.2 billion budget hole by borrowing against future lottery revenue.
Schwarzenegger has said a revamped lottery could double ticket sales in a decade. The $3 billion program has stagnated, and the Lottery Commission has lowered earning estimates for the year by $275 million.
Administration officials say they have no intention of breaking a revenue-sharing agreement which gives Indian casinos exclusive rights to slot machines.
"What we have is a draft," said Schwarzenegger's spokesman Aaron McLear. "Whatever the final version will say, unequivocally the state will not allow the state to have Keno."
According to the 2005 California Performance Review, Keno earned $8 million per week. Immediately after the 1996 ruling, the lottery replaced Keno with Hot Spot, and sales fell to about $3.3 million per week.
Dickstein said the draft language from the administration also "sets the stage" for the lottery to use devices that are similar to slot machines.
Borucki said the lottery is not interested in video lottery terminals or slot machines. Rather, the administration's proposal seeks to remove technological restrictions on lottery vending machines, Borucki said.
Call Judy Lin, Bee Capitol Bureau, (916) 321-1115.
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