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Keno a new option, others remain illegal

- Video games where payoffs are made remain illegal in Pennsylvania, as was illustrated during this raid in McKeesport in December. Cindy Shegan Keeley|Daily News
Video games where payoffs are made remain illegal in Pennsylvania, as was illustrated during this raid in McKeesport in December. Cindy Shegan Keeley|Daily News
- Video games where payoffs are made remain illegal in Pennsylvania, as was illustrated during this raid in McKeesport in December. The Corbett administration expected no change in the law against such payoffs as it presses a deal with a British firm which would add keno games as part of its bid to privatize the Pennsylvania Lottery. Cindy Shegan Keeley|Daily News
Video games where payoffs are made remain illegal in Pennsylvania, as was illustrated during this raid in McKeesport in December. The Corbett administration expected no change in the law against such payoffs as it presses a deal with a British firm which would add keno games as part of its bid to privatize the Pennsylvania Lottery. Cindy Shegan Keeley|Daily News

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Monday, Feb. 4, 2013, 3:06 a.m.
 

Although keno will be a new game option for gamblers under Gov. Tom Corbett's proposed private management agreement with Camelot Global Services PA LLC, video games likely will remain illegal if and when the British firm takes over.

The company is in a 20-year agreement that obliges Camelot to produce a minimum of $34.6 billion in annual profits.

“Any video poker with payouts is unregulated and illegal in Pennsylvania,” Eric Shirk, Corbett's deputy director of communications, said last week. “Video poker is not something we are considering, nor does the private management agreement with Camelot consider video poker, video poker-like games or video lottery terminals.”

Raids still take place at establishments that pay video poker winners, such as one in McKeesport in December.

“Bar owners and private club trustees have rationally chosen to violate Pennsylvania's gambling laws either to help sustain their businesses, increase profits, or lower their prices to increase patronage,” Kutztown University associate professor of sociology Timothy O'Boyle wrote in a 2006 Journal of Economic Crime Management article.

O'Boyle called it a multi-billion-dollar industry, but times may be changing.

In McKeesport's Tenth Ward, there's an online video game at the Elbow Room.

Elbow Room owner Jack Brusick said it is there for entertainment only, but he's heard from others who do make payouts.

“They're all complaining that they're not making money on the machines right now,” Brusick said. “They can't compete with the casinos and what they pay out.”

Video games could be legalized — at a price.

“We would have to reopen the gaming legislation and renegotiate with the casinos,” said state Sen. Kim L. Ward, R-Hempfield Township, chairman of the Senate Community, Economic & Recreational Development Committee. “We would have to give them back their license fees.”

Under 2004 legislation that opened the door to electronic gaming parlors or casinos, it wouldn't be the entire $50 million one-time slot machine license fee each casino paid.

That was the case for five years after the October 2005 deadline for the first casino applications. After that five-year period, the return started to decrease by approximately $8.33 million a year.

If video poker was legalized today, the casinos could seek a return of $25 million apiece.

Last month Ward and other Republican Senate leaders addressed concerns about Camelot as a potential competitor with the casino industry.

“There is concern that the contract would allow Camelot or its subcontractors to expand the lottery from what is generally considered to be ‘keno' and provide unlimited types of Internet and monitor-based interactive games,” the senators wrote in a letter to the governor obtained by Tribune-Review News Service.

“(The governor) remains committed to a cautious approach to the introduction of any new games authorized by existing statute,” Shirk said.

“We are confident that Camelot shares the same commitment.”

Shirk also said it is inaccurate to characterize keno as an alternative for bars that utilize video. However, in a Trib Total Media interview, Camelot spokesman David La Torre said keno “is a more convenient way for players to participate in social situations,” primarily bars or taverns.

Brusick played keno while on a visit to a bar in New York.

“I played it up there and I noticed that no one played those machines,” the Elbow Room owner said. “It's not much of a favorite to play in casinos or anywhere.”

Brusick doubted that keno would show up in his eatery.

“If they allowed the poker and games like that I might be interested,” he said.

“Any bar that would offer keno would have to already be a licensed lottery retailer,” Shirk said. “Under the private management agreement, keno would be phased in over a few years, adding keno retailers along the way.

If GOP senators are concerned about Camelot competing with casinos, Democratic lawmakers are concerned with the deal, period.

“I don't have a problem with expanding whatever we are going to do but I think our own (lottery) can do it,” said state Sen. Timothy Solobay, D-Canonsburg. “I don't know why we need to give the farm away per se to someone else.”

“At best the governor is helping Camelot to sidestep the regulations that casinos must follow and at worse Camelot's keno and online games would be illegal,” sate Rep. Bill Kortz, D-Dravosburg, said. “In his desperate rush to privatize any state service the governor has created a mess.”

Shirk defended Camelot, noting that the British-based company was awarded the World Lottery Association's Responsible Gaming Award.

Patrick Cloonan is a staff writer for Trib Total Media. He can be reached at 412-664-9161, ext. 1967, or pcloonan@tribweb.com.

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