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No talks on sports betting until tribes’ exclusive rights recognized

Sportech, PLC's recent op-ed blamed the Tribes for “blocking" legislation to legalize sports betting. A more candid approach would acknowledge that both the Mashantucket Pequot and Mohegan Tribal Nations supported legislation legalizing sports betting as proposed by the Connecticut Jobs and Revenue Act. As beneficiaries of their own “exclusive” monopolistic contracts, Sportech, and the lottery too, should better appreciate why the tribes insist that the “exclusivity,” for which they paid $8 billion, can only be modified with their consent.

The op-ed demonstrates that Connecticut’s tribal gaming history remains misunderstood and misrepresented. It's time to set the record straight.

1. Connecticut didn't “give” the Tribes the right to casinos. The federal Indian Gaming Regulatory Act (1988) mandated state governments to negotiate "Compacts" with tribes authorizing gaming on reservations to the same extent allowed within state borders but subject to tribal regulatory oversight.

2. Connecticut resisted that mandate and fought the Mashantucket Tribe in court. The tribe won. Reluctantly, the state entered negotiations. Consensus was illusive and the federal mediator stepped in to sanction an agreement known as "Procedures.” Mohegan's Compact mirrors Mashantucket's "Procedures" word for word.

3. Operation of slot machines (“video facsimiles of games of chance”) remained a point of contention. A "moratoria" section was adopted allowing for future resolution by mutual agreement.

4. Foxwoods opened in February 1992 as a “table games only” casino with incredible success. As 60% of a typical casino's revenue is derived from slots, that meant money was left on the table. Federal law precludes states from “taxing” tribes so the parties utilized the moratoria language to grant the tribe “exclusive” rights to slots in exchange for 25% of the “win.” (February 1993 MOU.) Shortly thereafter, via MOU amendment, the tribe guaranteed the state $113 million annually to erase the state's deficit.

5. The MOU was amended again in April 1994 when Nevada casinos sought to circumvent the “exclusivity” covenant. Their pitch? Table games only. Without slots, they argued, the tribes would be obligated to continue payments, while the Nevada casinos built up capacity in Connecticut. (See “Preamble” 1994 amended MOU.)

6. Governor Lowell Weicker adamantly opposed casino expansion and feared that misguided legislation would result in lost slot revenue. He closed the loophole, expanding tribal "exclusivity" to include all “commercial casino games.” Close examination clearly supports that it was the state’s intent in 1994 to limit all future casino gaming to the tribes. We are committed to, and confident of, our ability to prove that in court if necessary.

7."…all future casino gaming” as opposed to the oft-analyzed term “casino games” is not a mischaracterization. Courts look at the “intent of the parties” when resolving contract disputes. In this instance, the intent is inherently clear. Some argue that “casino games” is self-explanatory. Why then, did the legislature request opinions from the attorney general? Then Attorney General Richard Blumenthal (now a U.S. senator) opined that the term means “games prevalent in casinos.” Attorney General George Jepsen called it an “open question.” My point? Courts won't be swayed by tortured analysis of phrasing, nor will they give credence to political opinion. Respectfully, it's irrelevant. What is relevant, though not binding, is Rhode Island's recent court finding that sports betting IS “casino gaming.” Further, sports betting was clearly “prevalent” in Nevada casinos in 1994 — the only state jurisdiction where such wagering was legal.

8. Prof. Daniel Wallach's committee testimony was interesting but not germane. He didn't acknowledge, nor explain, why the attorney general’s opinions differed from his own.

9. The state deliberately chose not to clarify the term “exclusivity,” nor to draw distinction among games, opting instead for the more generic and all-encompassing term "commercial casino games.”

10. Wallach asserts that sports betting isn't referenced in the Procedures. True. The MOU is meant to address what CANNOT be operated by others as opposed to what CAN be operated by the tribes.

11. Money and odds are integral to gaming. Legislation that wagers $250 million for the chance to “win” $13 million to $15 million and guaranteeing tribal litigation defies logic. It's made all the more puzzling when supported by an administration that is cowed into inaction by the mere “threat” of litigation by unnamed parties.

Where do we go from here? Rhetoric aside, the tribes are open to discussions, including those that might involve Sportech. "Exclusivity," however, is ours to share. If that's not acknowledged, we will once again be waiting for a federal court decision. In the meantime, Connecticut citizens will spend dollars in other states or play illegal markets and two of Connecticut’s largest employers, who also happen to be minority, family-owned and operated businesses, are snubbed. Very sad.

George Henningsen is chairman of the Mashantucket Pequot Gaming Commission.

 

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