Gaming experts call for an overhaul of Keno

John Wilen

Monday, July 12, 1999 | 10:55 a.m.

Keno faces certain extinction if casinos do not take steps to make their games more innovative.

That was the word delivered to a group of gaming executives at a recent Casino Management Association seminar by Ron Heinz, director of Keno at Fitzgeralds Casino, and by Victor Salerno, president and chief executive of American Wagering Inc.

"There's been a dramatic decline in recent years in Keno revenues," said Heinz. "If we don't change a thing ... it will continue to decline."

If Keno continues to follow its current trend, in four to five years it won't be around anymore, said Heinz. He noted that the Mandalay Bay hotel-casino recently opened without a Keno pit.

To save Keno, casinos have to attract younger players, said Heinz.

"We've got to get some new people into the game," he said.

One way to do this might be to re-think the standard 80-number Keno grid, said Heinz.

"If we're going to appeal to the Generation-X, Generation-Y people, this 80-number grid presentation has to go," said Heinz.

Salerno agreed, pointing to a version of Keno operated in Oregon. The game features an animated ball that bounces around the screen, landing on selected squares. Once chosen, a square grows. Salerno said the ball attracts a lot more young eyes than a standard Keno screen.

Another way to attract new players to the Keno pit is through the use of video Keno machines, which attract slot and video poker players, said Heinz.

Salerno called for innovations like terminals that can accept Keno tickets and pay out when a player wins. Waiting for a Keno runner to come back slows the game and turns people off, said Salerno. Because terminals would increase game speed, they would lead to an increase in the overall number of games, increasing player interest and house profits, he said.

"I think a more well-run game, that really has to become more automated, you will make more money off of," said Salerno.

Salerno also sees a future where Keno pits are equipped with hand-held remote-control devices that can be used to place wagers and speed play. Such gadgets are already in use in some Indian casinos, he said.

Keno managers should also consider changing the theoretical win on Keno games, said Salerno. He estimated the casino's theoretical win on Keno has decreased from 30 percent to 28 percent in recent decades, making it still one of the worst bets in the house for gamblers. Compared to that, the theoretical house win in race and sports book wagering is about 3 percent, he said.

If the Keno pits would give more back to their players, they would increase handle and overall win, said Salerno.

"I think those numbers can be re-worked," said Salerno. "Do you want to hold 100 percent of $10,000 or 50 percent of $100,000?"

Another innovation that will help Keno is networking, said Salerno. American Wagering, which operates Leroy's race and sports books in casinos throughout Nevada, is developing a networked progressive Keno game that will be offered in concert with its race and sports propositions, he said. The company will offer metered, progressive Keno within six months, said Salerno.

"I really think that Keno has a future," said Salerno.

No single innovation will save Keno, said Heinz. What's needed is an open attitude toward change, and some education to fix the misconceptions that have arisen about the game, he said.

"No single idea is going to change the game of Keno," said Heinz.

Keno managers in general have been slow to accept change, part of the reason the game has declined in popularity, he said. For instance, Keno pits have been computerized for years. But until recently, many Keno departments still employed Keno checkers to make sure the computers didn't make mathematical errors.

"We didn't re-examine ourselves," said Heinz. "We continued to follow the same path we'd been following for years and years and years."

As a result, Keno is usually lumped in with Bingo in the minds of casino executives, he said.

"Their perception of Keno is that it's just not important enough to worry about," said Heinz.

Keno is a social game in which a small amount of money can be played for a long time, he said. It should be sold on its merits, not as an amenity.

"I don't think it's necessary ... to look at Keno as an amenity," said Heinz.

Keno is more than just that game you play while eating, he said. In fact, some properties have eliminated Keno from their restaurants entirely, finding they do better when run from a separate pit, he said.

Keno is much less capital-intensive than slots or table games, he said. A well-run Keno game generates revenues per square foot that are comparable to other casino games, he said.

"Get out there and measure your Keno game's performance in terms of revenue per square foot," said Heinz.

Both Heinz and Salerno said it's important for casino managers to recognize Keno as a separate game with separate needs than other parts of the casino. Too often, said Salerno, responsibility for the Keno game is dumped on race and sports book managers.

If Keno is going to survive, casino managers have to adequately train and pay their Keno employees, said Heinz.

"In a successful game, these people are selling your product," said Heinz.