Connecticut Attorney General's Office
Press Release
Attorney General Urges Agreement With Tribes Before Legalizing Game Of Keno
June 1, 2009
"Without an agreement with the Tribes, or clarity in legal impact, the state is gambling more than $400 million for the sake of barely $60 million," Blumenthal said.
Blumenthal provided the opinion at the request of State Rep. Stephen D. Dargan, co-chair of the Public Safety and Security Committee, regarding a provision in Gov. M. Jodi Rell's budget legalizing the game of Keno.
Specifically, Dargan asked whether Keno is a technically considered a lottery game and whether legalizing Keno would impact the state's compact and MOUs with the Mohegan and Mashantucket Pequot Tribes.
Blumenthal said the law is unclear and courts are divided on the issue of whether Keno is considered a lottery game, and Rell's proposal is unspecific about the type and structure of Keno gaming contemplated.
"In short, in this situation, there is no clarity in the statute, no ruling from our state courts, no unanimity in other state courts, and most important, no relevant specific facts as to the operation and structure of the proposed game or even what type is proposed," Blumenthal wrote in his opinion. "Concluding whether the proposed Keno is a lottery game would be more a guess than a legal analysis.
"Because rulings are divided and details are lacking, and there are different types of Keno games, we cannot predict what courts would conclude about the type of Keno contemplated in the Governor's budget revisions.
"One critical point seems certain: a possible violation of the Tribal/State slot machine agreements could put at risk more than $400 million in state revenues. Therefore, after the details are determined as to the Keno game proposal, the most prudent and responsible course, fiscally and legally, would seem to be an amendment to the Mohegan and Mashantucket Pequot slot machine agreements."
Keno is a form of electronic gambling. In some places, including New York City, players select a set of numbers at a terminal where their tickets are printed. Every several minutes the games are displayed on a monitor where ping-pong like balls land on a spread of numbers. When players win -- with enough of their numbers matching those selected on the screen -- they collect their winnings from the establishment, whether a restaurant, bar or casino.
Blumenthal said that the relevant state statute, Conn. Gen. Stat. § 12-801(3), does not define the word "lottery." The Connecticut Supreme Court has never directly addressed the issue of whether Keno is considered a lottery game, but has "held that a lottery is characterized by three constituent elements, namely, a prize, a chance, and a price." Blumenthal said that definition could arguably encompass Keno, and several courts outside of Connecticut have found that Keno is a lottery game.
Other state courts have held that Keno is not a lottery game. The rulings show that the conclusion as to whether a specific Keno game is a lottery game depends on its specific structure and operation, because the term "Keno" can apply to a variety of different games, not all within the definition of lottery.
As to the state's agreements with the Tribes, the MOUs authorize the operation of video facsimile games, particularly slot machines, at the tribal casinos in Ledyard and Uncasville, as long as the Tribes pay the State 25 percent of the gross operating revenues from video facsimile machines.
Last year, these payments totaled over $411 million. These payments continue "so long as no change in State law is enacted to permit the operation of video facsimiles or other commercial casino games by any other person and no other person within the State lawfully operates video facsimiles or other commercial casino games."
Blumenthal said, "A court might conclude that the parties never contemplated the state operating casino games, including Keno, within the state while receiving 25 percent of slot machine revenue from the Tribal casinos. Similarly, the state could contend that Keno is not a 'commercial casino game,' but a court might disagree because clearly some types of Keno are prevalent in casinos, including the tribal casinos in Connecticut.
"Courts have been sympathetic to tribal efforts to protect their rights under the Indian Gaming Regulation Act and other federal statutes."
View the entire letter to Dargan - (PDF-283KB)