Hartford Business Journal

16 Hartford Business Journal • June 15, 2015 www.HartfordBusiness.com Keno gets a second chance in CT By Brad Kane bkane@HartfordBusiness.com K eno is looking for its second act in Connecticut. Two years after the betting game was passed into law and then repealed, state lawmakers have revived Keno as part of their $40.3 billion budget, estimating the game will contribute $44 million to government coffers over the next two fiscal years. Now, casino industry officials and the state are heading back to the bargaining table to hash out how the potential gaming revenue will be divided, with the hopes of actually getting Keno off the ground by January. Lawmakers adopted keno two years earlier, but it was repealed in 2014 largely because the game was never given a public hearing. This year the legislature did hold a public hearing before putting the measure in the state budget, which was controversial for its $2 bil- lion tax increase. Keno, however, didn't draw as much negative attention. "I don't know of any effort being made to repeal it," said Gian-Carl Casa, spokesman for the state Office of Policy & Management. Before keno can be implemented by the Connecticut Lot- tery Corp. at more than 3,000 retail- ers across the state, OPM and the state's two Native American tribes must negotiate how the revenues will be divided. As part of their exclusive agree- ments to operate casi- no games in the state, the Mohegans and the Mashantucket Pequots give 25 percent of their slot revenues to the state. The tribes have argued that implement- ing keno would violate the agreement. To satiate tribes' concerns, OPM agreed in 2013 to give them each 12.5 percent of the keno revenues. A similar deal is expected to be struck this time, said Chuck Bunnell, chief of staff for government affairs for the Mohegan Tribe in Uncasville. "The Mohegan Tribe has an excel- lent government-to- government relation- ship with the State and meets regularly with state govern- ment officials," Mohegan Chairman Kevin Brown said. "We remain willing and available to dis- cuss a mutually beneficial agreement that would allow the state to operate keno as we have in the past." Casa said OPM does not have a timeline on when tribal negotiations will be complete. The Connecticut Lottery Corp. is hopeful the OPM-tribal agreement is completed in time for the quasi-public agency to launch keno in Janu- ary, said Anne Noble, lottery president & CEO. "The lottery was prepared to launch keno two years ago," Noble said. "We look forward to putting this game in the market now." Keno will be available at the 2,800 lottery retailers currently operating in the state; the lottery hopes to add another 400-600 retailers over time, Noble said. Retailers will earn a 5 percent commission on the bingo-like game. Once fully implemented, Noble expects keno to generate $125 million to $300 million annually. The rollout should go quickly, Noble said, because the lottery already has developed the necessary software and game rules, and retail- ers are aware of how to run the game. "Our players already play keno in Rhode Island, New York and Massachusetts," Noble said. "Our players will respond favorably to having keno in Connecticut." n Kevin Brown, chairman, Mohegan Tribe Anne Noble, president & CEO, Connecticut Lottery Corp. corporation law in 2010 — had 32 compa- nies register in the first three years of its program. Oregon holds the record for most benefit corporations signed up on the first day of registration, 29. "The Connecticut law shows this state is on the cutting edge of this type of business," said Spencer Curry, co-founder of Glastonbury benefit corporation Fresh Farm Aquaponics, which was one of the 17 companies that signed up on the first day of the new law. "It speaks to the people who live here that they believe in this and that they made it a law." Hartford hub As interest in benefit corporations germi- nates, Hartford is vying to become a hub for socially-conscious entrepreneurs. Hartford incubator reSET, for example, recently doubled its Hartford office footprint to accommodate growth in new business ven- tures, particularly social enterprises. ReSET moved from its 3,000-square- foot downtown office on Pratt Street to an 8,700-square-foot office and laboratory space in the city's Parkville district. ReSet wanted to locate in a more vibrant neighborhood where entrepreneurs can not only start their businesses in a coworking space but also develop into later-stage ventures in their own offices, said Kate Emery, reSET's CEO. ReSET's goal is to attract a startup com- munity geared toward social benefits — rather than profits — and as the momentum grows, Hartford and Connecticut will become known as startup destinations for benefit corpora- tions, Emery said. "We are trying to make Connecticut the best state in the nation for benefit corpora- tions," said James Woulfe, reSET's director of advocacy and external affairs. ReSET has 50 members, although Emery said she expects that to grow significantly once the new Park Street space is built out. She said the new location provides easier access to the entrepreneurial community, because it has free parking, is near a CTfastrak station, and is in a more diverse neighborhood with more affordable rents. The organization, which has five employ- ees, charges $30 for a membership, $50 if a company wants a permanent desk in the coworking space, and $500 for one of the six private office spaces. In addition to legal services offered to reSET members by Hartford law firm Murtha Cullina, the organization also provides accoun- tants from Glastonbury's Fiondella, Milone & LaSaracina, and has an entrepreneur-in-resi- dence to help guide early-stage startups. Eleven companies have registered as social benefit corps this year, according to the Secretary of the State's Office, but Emery said she expects the number will grow. ReSET's annual Impact Challenge, which is a contest that provides funding to social ventures, more than doubled its applicant pool this year from 75 to 160, a sign that there are many more socially-conscious busi- nesses in the development pipeline. The total prize pool also is expected to double from $50,000 to $100,000 by the time the winners are determined in September. "We are trying to create an economy [leveraging] the implementation of the benefit corporation law," said Benjamin Simmons- Telep, reSET's program manager. "We want to create the Silicon Valley of social enterprise." Social good Fresh Farm Aquaponics was one of the first 17 companies to become a Connecticut benefit corporation. It grows vegetables and raises fish for food consumption using a sys- tem in which the fish fertilize vegetables and the vegetables clean the water for the fish. The company's stated social benefit is provid- ing food to underserved populations. Other Connecticut-registered benefit cor- porations include Farmington tech firm The Walker Group, which was founded in 1985; the West Cornwall Publishing Co., which seeks to provide parity between author and publisher; and Hartford tech firm Blueprint for Impact, which provides data to nonprofits. Fresh Farm Aquaponics will become the first company to graduate from reSET's coworking space. The company is moving into its own offices on the second floor of reSET's new 1429 Park St. location. Fresh Farm is building several versions of its aqua- ponics systems to showcase to potential customers. The company has 12 systems installed throughout the region. "We will be doing different types of work- shops here as well," Curry said. "We are try- ing to make the farming as easy as possible." The Fresh Farm space is one of six offices that reSET will start leasing out to companies on July 1. The new reSET space also includes a media lab to provide technical equipment for companies to market their business. Murtha Cullina lawyer David Menard, who provides legal services for reSET companies, said reSET is one of the premier organizations in Connecticut involved in social enterprise. "We need to make the startup community really something that the rest of the nation looks up to," Menard said. "ReSET is taking the lead in that area." n from page 1 ReSET seeks creation of benefit corp. hub P H O T O S | P A B L O R O B L E S (Clockwise from top left) ReSET CEO Kate Emery works with an entrepreneur in the organization's coworking space; construction is ongoing at reSET's new Parkville location to build a new media lab and offices for social ventures; Spencer Curry showcases the space where Fresh Farm Aquaponics will feature its systems.

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