Casino

Margaret Smith, of New Bedford, sits at one of the new slot machines in the renovated Newport Grand yesterday. Smith said she comes to play the slots once a month. The facility now has 1,500 video-slot machines.

The Providence Journal / Frieda Squires

NORTH PROVIDENCE — When Muhammed Javed first bought the North Providence Food Mart on Mineral Spring Avenue 3½ years ago, he says, the Keno terminal at his grocery was so busy he had to restrict customers to no more than one hour at a time.

Now his chairs sit empty all day with no one to stare at the flashing screen.

“I had a few people coming in with a few dollars, but that was it,” Javed said recently. “If you don’t have money, why gamble? They’re saving if for the gas tank.”

His experience is not isolated. Introduced on the Rhode Island gambling scene in 1992, Keno sales began to dip after the March 2005 adoption of a statewide smoking ban. State Lottery Director Gerald Aubin attributes the further decline this past year to the worsening economy and a drop in the “disposable income” of people who, at other times, might sit on a stool at their local tavern or coffee shop, order a drink and something to eat, and play several rounds of Keno.

Powerball ball sales are also down when compared to the same period last year, when a humongous jackpot rolled from the beginning of July until the end of August before it paid off at $314 million.

But economic angst and uncertainty hasn’t hurt instant ticket sales, which have jumped 6.8 percent in the months since the new state budget year began on July 1.

In other words, people may no longer have the extra $20 to go in and play Keno for an hour, but they may have an extra $1 or $2 they can spend on a scratch ticket when checking out their bread and milk and newspaper at the cash register.

“Is an individual going to spend the $1 or $2 or $3 for a very inexpensive form of entertainment? It may be one of the last things they want to give up,” Aubin said in a recent interview.

With the state’s largest slot parlor struggling to pay off $565 million in loans — and teetering on the edge of bankruptcy, according to one of the nation’s major credit-rating agencies, and major league casinos such as Mohegan Sun putting expansion plans on hold — state officials here are counting more on older, more traditional types of Lottery games to generate the year-to-year gains on which state government has come to rely so heavily.

For example, the Lottery is about to unveil a new $1-million raffle. With tickets going for $20 each, a $1-million winner guaranteed and a rollout scheduled for early October, here’s the deal: the Lottery will sell 120,000 tickets and no more. The drawing will take place at Twin River in Lincoln on New Year’s Eve. And after paying the $1 million grand prize — another $200,000 in lesser prizes and promotional expenses, the Lottery expects to net close to $900,000.

But the state’s share of the annual Lottery bounty would have to grow by an overall 3.2 percent — from $354.3 million last year to $365.5 million this year — for state government to meet the expectations on which this year’s state budget was based.

Compared to past years, when the state Lottery posted double-digit gains year after year, that might seem modest, especially after last night’s “grand opening” of a refurbished Newport Grand, after a $28-million renovation that transformed its former jai alai fronton into additional space for more video-slot machines, new virtual blackjack tables and expanded food and beverage service.

But while gross sales are up at the slot parlors and convenience stores, the amount left after payouts to winning Keno, traditional Lottery and video-slot parlors was down $703,141 between July 1 and Tuesday of this week, compared to last year, according to a Lottery report.

Gambling dollars are the state’s third largest source of revenue, after sales and incomes taxes. When asked yesterday how confident he is the Lottery can meet the revenue expectations that have been placed on it, state Revenue Director Gary Sasse said: “A lot depends on the economy. It’s more uncertain, more volatile than it has been in the past, but we need a little more time…we need at least the first-quarter’s experience to better evaluate our expectations.”

The numbers are still rolling in. But this much is a given: the vast majority of the money that goes into the Lottery — and from there into the state’s General Fund — comes from the video slots at Twin River and Newport Grand. Of the $354.3 million in gambling dollars that went into the state treasury in the budget year that ended on June 30, $59.4 million came from Keno, instant tickets and other traditional games. The lion’s share — $294.9 million — came from the 5,847 electronic gambling machines at the two slot parlors.

Aubin told a legislative oversight commission last week that video-gambling in Newport and Lincoln is “doing well but not as well as we’d like it to be doing right now.”

The state bowed to Twin River’s request for permission to offer up to $1.5-million worth of free play to frequent players in an experimental attempt to boost business. The 92-day trial period ends tomorrow. Lawmakers and the governor also gave both slot parlors the permission Twin River sought to stay open all night on weekends, though only Twin River opted to do so.

Sasse, the state revenue director, is awaiting an analysis from Sullivan & Company, a private accounting firm, on how well the free play has worked at spurring new business or, conversely: how much was given away without measurable gain. In the interim, he expects to extend the trial period by a month.

The raw data is inconclusive. At Twin River, the amount of money left in the till after player payouts was up by 6.76 percent in July, 2.89 percent in August. September has been up and down. At Newport Grand, net-income was down 7.11 percent in July and 12.75 percent in August, according to Lottery reports.

After $288 million in renovations unveiled yesterday that were aimed at making room for more food and drinks, video-slot machines and “virtual” Blackjack tables in space that once housed a jai alai court and 3,000-seat auditorium, Newport Grand is hoping to reverse its own fortune.

kgregg@projo.com