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Manchester mayor wants city to share in any Keno revenue at The Derryfield

New Hampshire Union Leader

March 08. 2018 11:39AM


MANCHESTER — Despite a unanimous vote by an aldermanic committee recommending language be added to the city’s management agreement with The Derryfield Restaurant allowing Keno operations there, the matter is headed for further review after Mayor Joyce Craig said she thinks the city should get 25 percent of any new revenue brought in by the game.

“This is new revenue, and something the city should share in” said Craig.

Attorney Roy Tilsley went before the Lands and Buildings Committee last month to address concerns over the popular restaurant and lounge on Mammoth Road offering Keno 603, after receiving word that “various people (in) city government remain uncomfortable” with the fact that Keno is not specifically addressed in the existing management agreement between the city’s Parks and Recreation Department and BLL Restaurant Inc.

The current agreement prevents Derryfield management from putting slot machines or video poker machines on the premises, and requires that all employees be informed that gambling is prohibited on the premises at all times.

According to Tilsley, the language was added to the agreement in response to an allegation that an employee was running a private football pool at the restaurant.

As Tilsley pointed out to the aldermen, Keno 603 does not require management to have either video poker machines or slot machines on site.

“Just as a convenience store does not become a casino simply because they sell lottery tickets, my client is not allowing or conducting unlawful gambling when it offers a New Hampshire State Lottery Commission game as a licensee of the Lottery Commission,” wrote Tilsley in a letter to city aldermen.

To address concerns, Tilsley drafted a fifth addendum to the management agreement that specifically allows BLL Restaurant Inc. to operate Keno on site. Committee members voted unanimously to recommend the new addendum be approved.

On Tuesday, Craig raised concerns with language in the proposed addendum referencing Keno and “any other state lottery program.”

“I’m not comfortable with that,” said Craig. “I don’t want to agree to any other state lottery programs without knowing what they are.”

Keno can only be played in restaurants and bars with a liquor license. Businesses hosting the games get an 8 percent commission on how much is waged on Keno each day.

Craig suggested the city receive 25 percent of the 8 percent in new revenue the Derryfield receives from Keno sales. Under the existing management agreement with Manchester officials, the city receives 1.5 percent of the gross revenues generated by the restaurant.

“I agree with your assessment,” said Alderman Keith Hirschmann of Ward 12. “They are a public-private partner with us. It’s a revenue sharing proposition. I think it’s very fair.”

Alderman-at-Large Joseph Kelly Levasseur owns Theo’s Restaurant, which also offers Keno.

“If you do $45,000 in Keno sales, you take 8 percent of that which is only $3,200,” said Levasseur. “I don’t think 8 percent is that big a deal. I don’t know why we would make one particular restaurant pay a percentage to the city. I don’t think 25 percent on the 8 percent is fair to them at all.”

According to Craig, the Derryfield has generated about $61,000 in overall gross revenue from Keno sales since the game launched on Dec. 15 — which would yield about $5,000 in non-property tax revenue.

“This is in a building that the city owns,” said Craig. “There’s a difference between your restaurant and the Derryfield. We have an agreement with the Derryfield. I think the city has an opportunity, a responsibility, to the taxpayer to negotiate an opportunity for new revenue. The city should benefit a little.”

Tilsley said he and his clients don’t believe the agreement with the city needs to be altered to allow for Keno sales, but feel it is in “everyone’s best interests” to come to an agreement with city officials on the concerns raised.

“This is not illegal gambling,” said Tilsley. “This is run by the State Lottery Commission. We don’t view the Keno product as offering gambling. We’re not doing this because Keno is a real winner for us; we are doing it to maintain the business we have overall.”

Tilsley said Tuesday night was the first he had heard of Craig’s proposal, and wasn’t prepared to discuss specifics of her plan that night.

“If you had called the owners, they might have agreed to it and this wouldn’t have to go back to committee,” Levasseur told Craig. “This is not the way we negotiate with good partners with the city of Manchester.”

Aldermen voted to send Craig’s proposal to the Lands and Buildings Committee for further discussion.

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