June 22, 2018
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Budget panel OKs Mega Millions

By Mal Leary, Maine Public

AUGUSTA, Maine — The Legislature’s Appropriations Committee voted unanimously Sunday afternoon to put the implementation of the Mega Millions lottery game into the budget, but rejected a proposal to launch a keno game in Maine.

Committee members said the votes indicated a preference for a game similar to others that already exist in Maine, as opposed to a new game like keno that would require new online infrastructure.

“I think we tried to make a decision here based on the governor’s bottom line,” said Sen. Bill Diamond, D-Windham, co-chair of the panel. “He is pretty adamant about not starting new games. This is not a new game; it’s another game like Powerball and Megabucks.”

Rep. Sawin Millett, R-Waterford, the GOP lead on the panel, agreed there is a distinction between doing another online game and creating a new game with a new online system infrastructure like keno. He said that while there is little enthusiasm for gambling among GOP lawmakers, they likely would support the compromise.

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“In the end I think they will probably prefer Mega Millions to some new game or expansion in a dramatic sense like keno,” he said. “Having voted keno out and Mega Millions in, I think the compromise will generally be acceptable to my caucus.”

The Mega Millions game is now in 33 states and has the same large jackpots as Powerball. All of the states in New England, except Maine, have decided to add the Mega Millions game to Powerball and other online gambling that they offer.

“We will lose some sales when there is a big [Mega Millions] jackpot and New Hampshire has the game and we don’t,” state lottery director Dan Gwadosky said under questioning from the committee last month. “Some folks will go over to buy a ticket in New Hampshire.”

He told the panel there would be some “cannibalization” of revenue from other lottery games, but that lawmakers could count on about $125,000 a month in net new revenues by adding Mega Millions. He acknowledged that is a “conservative” estimate of what the revenues may be from the game.

The argument of lost revenue to New Hampshire was cited by Baldacci in his support for adding the Powerball game to the state lottery in 2004.

Diamond said the hope is to start the Mega Millions game in May so some revenue is gained in the current budget year. He said that while the move does not generate a lot of revenue — about $1.5 million in its first full year of operation — it will help as the panel tries to finish work on the budget this month.

Finance Commissioner Ryan Low said the decision by the committee is “disappointing, but not unexpected” as lawmakers grapple with rewriting the state budget to reflect less revenue in this recession. The budget gap is $310 million, even after state revenue reprojections and additional one-time federal aid.

“I would say it’s the lesser evil,” Low said. “It’s still adding another game into the mix. What we would like is a chance to see if the changes we have made to the lottery recently, let’s see if those changes work.”

Low said Megabucks was changed a few months ago to a $2 ticket from $1 with a minimum top prize of $1 million, up from $500,000. He said there are early indications it is working, with overall lottery revenues up in the last few months.

But committee members supported the Mega Millions because it will allow them to restore funding to a lot of programs that were cut in the governor’s budget proposal.

“It will help restore some funding for programs that committee members, and members of the Legislature, want to see funded,” Diamond said.

The vote by the committee could be reversed, but even Low thinks that is unlikely as the panel seeks to reduce the effect on programs.

The battle over keno may not be over, either, with some lawmakers on the Legal and Veterans Affairs Committee looking at keno as a way to help nonprofit groups raise money for their organizations.

Keno would work similarly to Powerball and Megabucks, but the drawing of winning numbers occurs every 10 minutes or so instead of a couple of times a week like the existing online games. It would require a new online system to be developed.

The game is aimed at social gathering areas, such as restaurants and bars, where a video display would allow patrons to check to see whether they have a winning ticket. Thirteen states now have keno games as part of their state lottery operations.

It is estimated a Maine keno game would have sales of $8.4 million in the first year, yielding about $2.4 million for the state.

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