The operation of keno in David City has been under the City Office’s scrutiny for months now as the regional operator of the gaming business ran into potential legal snags and the stream of revenue dwindled.
Keno, which has provided thousands of dollars for community betterment projects over the years, was terminated by the City Council at its Sept. 13 meeting.
The Council voted 4-2, with Council members Kevin Hottovy and John Vandenberg voting no, to terminate the operation.
Currently, keno was in operation at Don’s Bar on Fifth Street. The bar had picked up the gaming operation, run through Todd Zeilinger of Zeilinger Keno, Inc. when a previous operator, Ryan’s Roadhouse, closed up.
It has been several years since the city had two bars that were open and offering keno.
No one attended the meeting in favor of keeping keno alive, but there was some discussion about whether it could be more profitable if it was established at the soon0-to-be-completed clubhouse of the David City Golf Club.
“The guys on Wednesday night after men’s league, they might want to play keno, I don’t know,” said City Clerk Joan Kovar.
Hottovy asked: “Does a second operator get us to where this might cash flow?”
Kovar explained that the local operation had a big winner in the last year or so, and the city was still in some debt over that payout. The revenue coming into the city was not sufficient to cover the cost of city staff members filing all of the necessary reports.
Gross revenue for the summer was $312 in July, $241 in June and $424 in May.
“At this point we’re still in the hole,” Kovar said.
Last January, Nebraska gaming officials have Zeiliner of conspiring to conceal $1.28 million via illegal bets and committing more than 260 violations of state rules and regulations.
The state Department of Revenue's Division of Charitable Gaming was seeking to fine Zeilinger Keno $263,000 and revoke its lottery operator and worker licenses. Losing Zeilinger’s service would leave 30 Southeast Nebraska communities in need of a new company.
Revenue dropped after 2014
Up until three years ago, the city was seeing thousands of dollars flow through the keno operations, but the City Council wasn’t always convinced that it was worth the trouble
The keno audit of December 2014 showed that Keno operations in the city grossed $75,428.98 for the fiscal year ending Sept. 30.
In fiscal 2004 the keno operations grossed $128,000. Three years later with multiple bars operating keno, the gross was $206,000.
The number of keno operations has been in flux, as of late 2014 only Don’s was running the game.
Keno players received prizes totaling $55,339, and $721 in prizes went unclaimed.
The total expenses and taxes paid after the prizes money is paid out was $12,729.64.
For community betterment projects, the city received $11,199. The city keeps an account of $33,000 for the chance that a major prize would need to be paid out.
The city has had two keno operators in the past, but the successor to Ryan's Roadhouse did not pick up the operation. El Centenario now occupies that location. On Fifth Street, Duering’s Tavern, the former Thomas Tavern, closed in early 2013, ending a long run of keno at that location, which is home of BBQ Burgers and More.
The City Council briefly considered dropping keno in 2013, but decided to move forward with a new payout arrangement with keno contractor Zeilinger Keno, owned by Todd Zeilinger of Lincoln. Under the new payout, David City received seven percent from the keno funds up front, unlike the old agreement, which put the city last in line.