HARTFORD, Conn. – Claiming it is a big loser when it comes to a free slot machine promotion at the Mashantucket Pequot Tribal Nation’s casino, the state of Connecticut has filed a lawsuit charging that the promotion violates the tribal/state gaming compact, depriving the state of hundreds of thousands of dollars a month.
Connecticut Attorney General Richard Blumenthal filed the action in state Superior Court in Hartford on Dec. 14 on behalf of the Division of Special Revenue Executive Director Paul Young.
The lawsuit claims that the value of the ”Free Slot Play” coupons, worth between $5 and $1,000, given to patrons of Foxwoods Resort Casino should be included in the slot machine revenues that the tribe pays to the state.
The issue first came up in October, when Blumenthal said the tribe is not including the value of the coupons in its gross operating revenues, and is deducting the amounts it gives to its customers from its winnings.
A gaming compact negotiated in 1993 gives Connecticut 25 percent of all gross slot machine revenues. The state receives a total of around $425 million a year in combined slot revenues from Foxwoods and the Mohegan Sun, the state’s other casino.
Foxwoods issued a statement in response to the attorney general’s lawsuit disagreeing with his premise.
”Although we have a difference of opinion with the state, the tribe embraces the judicial process and this is evident in our decision to waive sovereign immunity in this case. Although we feel our arguments will prevail, we have set aside more than $1 million in case the judge disagrees. This, we feel, is more than fair,” MacDonald said.
Foxwoods began its Free Slot Play promotion in September. Blumenthal said the tribe has been depositing around $350,000 a month in an escrow account since the issue first arose.
”This legal action is unprecedented and unfortunate, but the Mashantucket Pequots must play by the rules and pay the state all they owe under the slot agreement. My office is asking the court to require the tribe to include Free Slot Play coupons in calculating payments to the state. While this court action involved cooperation by the tribe – waiting sovereign immunity in this state forum – my goal is a formal order requiring full payment to the state,” Blumenthal said in a prepared statement.
When the issue first arose, Foxwoods President John O’Brien cited a Sept. 15 letter from Connecticut Comptroller Nancy Wyman that ”clearly stated that in her view these types of promotions did not constitute a wager that would be calculated into casino revenue. In so doing, she used the IRS’ definition of a wager.”
Blumenthal said he expects the court to rule within a year.
