Keno: Gambling’s Ugly Underbelly UPDATED

January 16, 2013 | No comments | Posted in Gambling, Politics | Tags: , , ,

by Brandon McGinley

(UPDATE: Though this post refers to the current lottery privatization proposal since it is a present and ongoing controversy, the idea of introducing keno as a revenue generator exists outside this proposal as well.  Although I obviously think that the keno aspect of the proposal militates against it, the debate about privatization as a principle and about keno as a principle are distinct.  Thank you to Nathan Benefield of the Commonwealth Foundation for making this point, which I should have made clearer in the original post.)

While much ink has been spilled over the process by which lottery privatization has progressed in Pennsylvania, not enough attention has been paid to the most dangerous aspect of the proposal: the introduction of a highly regressive and anti-social form of revenue generation for state government.  (Do see, though, PFI Vice President Thomas Shaheen’s op-ed on the topic in the Patriot-News.)

Yesterday’s presentation by Camelot, the British corporation that has been offered the contract to operate the Pennsylvania Lottery, made it clear that the foundation an important aspect of the business plan is to expand the most addicting and anti-social forms of gambling to as many Pennsylvanians as possible.  The company’s number one strategy is to “stabilize and then grow terminal-based games”–that is, video keno machines–and its first goal is “increasing participation beyond the core player.”  (UPDATE 2: Nathan Benefield also kindly points out that “terminal-based games” refers to traditional “jackpot drawings,” whereas “monitor-based games”–number 6 among Camelot’s strategies–refers to keno.  I apologize for the error in nomenclature.)

What does this mean in practice?  According to The Citizens Voice in Wilkes-Barre, there will be a pilot program in which 500 alcohol-licensed establishments can install the machines, likely beginning later this year.  Pilot programs are usually weaselly ways to pretend that due diligence is occurring, when in fact full implementation has already been planned (barring a massive failure, such as the Pennsylvania Liquor Control Board’s wine kiosks).  A reminder: keno is the cornerstone of Camelot’s proposal; the chances of it being abandoned are very slim.

And what is keno?  Essentially it is a personal, real-time numbers-based lottery game.  But rather than waiting for a twice daily drawing, the player has his or her own personal monitor that provides instantaneous feedback.  It is a perpetual lottery.  And it presents the opportunity for swift, massive losses–the Shaheen article indicates that expected payouts can be as low at 69 cents on the dollar.  But the game dangles the promise of a big payout just around the corner…

We mustn’t be timid about describing this as what it is: a tremendous and highly-regressive tax (31%!), largely on the under-privileged and the elderly.  It is funding government programs on the backs of precisely those whom those programs are supposed to benefit.  It is an overwhelmingly cynical attempt to tap into the hope–necessarily more common among the lower classes, the unemployed, and those on fixed incomes–that Lady Luck will deliver a payday in order to make a buck for the Harrisburg bureaucracy.

Appeals to the “freedom” of the players are equally cynical, and are rarely made by those who have experienced want.  It is easy to talk about freedom when the game holds no appeal for oneself.  And do we foster entrepreneurship and initiative by dangling–at every corner bar!–the hope of an escape from poverty (or at least the hope of a reprieve) by luck rather than work (or, God forbid, community solidarity)?

And what about the freedom of the addict?  The instant gratification and ubiquitous availability of the proposed keno program remind one of nothing more than pornography. These qualities–taken in combination with the primal thrill many receive from gambling–create a toxic and addictive cocktail.  And it is the stated goal of Camelot to further entice participation!  That is the avowed purpose of video keno–to bring the lottery to as many people as possible.  It is an unpleasant thing to say, but honesty demands it: the success of this program depends on the addictiveness of the game.  Addicts equal revenue.

It is one thing to sequester such gaming to a few large casinos.  Most patrons currently have to make a special trip to play, allowing most to develop a more detached and healthy relationship with gambling; it becomes–again, for most–an irregular, “special day” activity.  Consider, then, the difference when instant-gratification gambling becomes an unavoidable aspect of everyday life–when every corner bar and T.G.I. Friday’s has a bank of screens glowing with the promise of a spontaneous payday.  Consider the difference when almost every establishment that serves alcohol also provides fast-paced gambling, and alcohol and gambling become associated with one another.  I don’t need to elaborate on the dangers of that combination.

This proposal, though, is socially corrosive beyond questions of finance and even addiction.  This type of gambling–just an individual and a screen–is alienating.  It isolates the player in a tiny universe, where all that exists is the player, the machine, and the fleeting though intoxicating thrill of the game.  It takes one of the most important of social institutions–the bar–where communities come together, friendships are made, plans are hatched, and disputes are settled (and sometimes commenced), and imposes upon that place this terribly profitable individualistic temptation.  It is a temptation–again like pornography–to recede from the world to a domain of private pleasures.  No matter how much revenue video keno might accrue for the state, it cannot make up for its corrosive and anti-social effects.

Again, one might argue that “nothing is being imposed on these establishments.”  Though superficially true, I think that few business owners will decline a new source of revenue, especially once competitors have installed the machines.  I would hope that wise barkeeps would recognize that the effects on the atmosphere of the establishment would outweigh the benefits both abstractly and, in the end, financially.  But I’m not holding my breath.

The great political consternation over the transparency and legitimacy of the lottery privatization process has obscured substantial questions about the substance of the proposal itself, as public policy.  Video keno–the cornerstone of the proposal–is a cynical attempt to cash in on desperation and bad judgment–bad judgment that the state, by way of Camelot, will be encouraging.  It supercharges the lottery, making it into an activity, an alienating and intoxicating form of private entertainment (but in a public place).  No amount revenue that can accrue to state coffers could make up for the damage to the common good promised by this proposal.

(cross posted at The Family Forum)

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