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Attorney General's Opinion

Attorney General, Richard Blumenthal

July 16, 2002

Susan B. Townsley
Executive Director
Division of Special Revenue
555 Russell Road
Hartford, CT 06111

Dear Ms. Townsely:

This is in response to your recent request for an opinion on whether the Division of Special Revenue (DOSR) must review and approve the Mohegan Tribal Gaming Commission's Cashless Wagering System (CWS) for slot machines proposed for use at Mohegan Sun Casino in Uncasville, Connecticut, in advance of implementation. For the following reasons, we believe that the DOSR is required to review and approve (or disapprove) the regulatory standards for the CWS in advance, but not the CWS system itself. If the system fails to operate in accordance with the approved standards, remedies for correction are available pursuant to the Tribal/State Compact. Nevertheless, DOSR may review the system and software in advance if the agency chooses to honor the Tribal Gaming Commission's request that it do so.

The CWS, as the name implies, permits casino customers to wager without handling cash. One of the features of the system involves the use of a player's card. As you describe it, in order to use the CWS, a patron first deposits money into an account. The patron can then access his or her account at the Casino's Cashier's Cage, or at any slot machine. At a slot machine, the player inserts the player's card into a card reader attached to the machine, and inputs a personal identification number. Once the patron accesses the account, he or she can transfer money from the account to the slot machine. The player can then play the machine and/or take out the money and/or, when finished gambling, return the money to the account.

The DOSR has some regulatory oversight over the operations at the Mohegan Sun Casino by virtue of the Tribal/State Compact negotiated pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. § 2710. The Compact, signed in 1994, contains standards for the operation of games. The parties agreed that, "Such standards shall protect the public interest in the integrity of the gaming operations and shall reduce the dangers of unsuitable, unfair or illegal practices and methods and activities in the conduct of gaming." Compact, Sec. 7(a). The initial set of standards included rules for the operation of slot machines (Video Facsimile Games). Compact, Appendix A, Sec. 31. A moratorium on the operation of slot machines was lifted in 1994 pursuant to a Memorandum of Understanding (MOU) which included a requirement that the Tribe contribute twenty-five percent of the gross operating revenues from video facsimile machines to the State. See MOU (April 25, 1994).

The Compact also contains a mechanism for amending the standards of operation for slot machines. The provision provides, in pertinent part, as follows:

Notwithstanding the provisions of subsection (a) of this section, the Tribal gaming agency shall not revise the standards of operation relating to technical standards for video facsimile games and set out as section 31 of Appendix A without the prior approval of the State gaming agency. Said standards may be revised by written agreement between the State gaming agency and the Tribal gaming agency following the written recommendation and detailed explanation of the proposed amendment to such standards by the gaming test laboratory designated in accordance with such standards.

Compact, Sec. 7(c).

Pursuant to this section of the Compact, the Tribal Gaming Commission has asked the DOSR to approve revised standards for the operation of video facsimile games which would allow the CWS. The Commission has also asked the DOSR to approve the system itself, including the software.

Clearly, Sec. 7(c) authorizes the DOSR to review and approve (or reject) proposed changes in the standards for the operation of slot machines. In fact, the DOSR is in the process of reviewing proposed standards which would allow the operation of the CWS. However, the Mohegan Tribal Gaming Commission's request for the DOSR to review, for approval, the system as well, is the issue for this opinion. You note that the Compact does not provide for such review and approval, and we cannot find any such provision either.

Concerning the interpretation of tribal compacts, we have often noted:

In analyzing compact agreements, the ordinary rules of statutory and contract interpretation are employed. See Oklahoma v. New Mexico, 501 U.S. 221, 246, 111 S.Ct. 2281, 115 L.Ed.2d 207 (1991) (concurring opinion); United States v. Utah, Nevada & California Stage Co., 199 U.S. 414, 423, 26 S.Ct. 69, 50 L.Ed.2d 251 (1905). In interpreting written agreements, the goal is to discern the intent of the parties. See Lodge 7004 Intern. Ass'n. of Machinists v. United Aircraft Corp., 193 F.Supp. 69, 70 (D.Conn. 1961). The intention of the parties is to be ascertained from the language used, and the language must be given its common meaning and usage. Scribner v. O'Brien, 169 Conn. 389, 398, 363 A.2d 160 (1975). The agreement must be interpreted as a whole, with all relevant provisions considered together. Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 134, 464 A.2d 6 (1983). Doubtful expressions should be interpreted in favor of the Tribe. 74 Am.Jur.2d Treaties, § 33.

1998 Conn. Op. Atty. Gen., Letter to George Wandrak (January 12, 1998)

No provision of the Compact requires the DOSR to review and approve, in advance, operating systems or software for games. To the contrary, the review and advanced approval process is limited to the standards. If software or a system fails to comply with the standards, explicit remedies are called for in the Compact:

If the State gaming agency determines that the Tribal gaming operation is not in compliance with the provisions of this Compact the State gaming agency shall deliver a notice of non-compliance to the Tribal gaming agency and the Tribal gaming operation setting forth the nature of such non-compliance and the action required to remedy such non-compliance. In the event that the Tribal gaming operation fails to comply with any provision of this Compact following receipt of a valid notice from the State gaming agency requesting correction of such non-compliance, the United States District Courts shall have jurisdiction pursuant to 25 U.S.C. § 2710(d)(7)(A)(iii) over any cause of action initiated by the State gaming agency to enjoin a class III gaming activity located on the Reservation and conducted in violation of this Compact. The Tribe hereby waives any defense which it may have by virtue of its sovereign immunity from suit with respect to any such action in the United States District Courts to enforce the provisions of this Compact, and consents to the exercise of jurisdiction over such action and over the Tribe by the United States District Courts with respect to such actions to enforce the provisions of this Compact. In addition to the remedies provided hereunder, the State may exercise its right pursuant to subsection (d) of this section to petition the National Indian Gaming Commission to impose penalties including civil fines and temporary or permanent closure of gaming facilities for violation of the ordinances of the Tribe including the provisions of this Compact incorporated in such ordinances.

Compact, Sec. 13(c).

Tools for the detection of any flawed systems or software are also provided for in the agreements between the parties. The DOSR is authorized to inspect Tribal gaming operations pursuant to Compact Sec. 13(b) which provides, in pertinent part, as follows:

The State gaming agency shall have the authority to review the tribal gaming operations in order to determine whether such operations are conducted in compliance with the provisions of this Compact, and for that purpose personnel employed by the State gaming agency shall have access to all areas of the gaming facilities without prior notice for the purpose of audits of the Tribal gaming operations, and personnel employed by the Tribal gaming operation shall for such purposes provide such State personnel auditors access to locked and secure areas of the gaming facilities in accordance with the standards of maintenance and operation promulgated pursuant to this Compact. Such State personnel shall report to the State gaming agency regarding any failure by the Tribal gaming operation to comply with any of the provisions of this Compact. Each Tribal gaming operation shall provide the state law enforcement agency and State gaming agency with access to reasonable office space for the use of their personnel for the purposes of such review activities. Personnel employed by the State gaming agency may attend the regular count conducted by the Tribal gaming operation in accordance with the standards of operation and maintenance adopted pursuant to section 7 of this Compact. Personnel employed by the state gaming agency shall not interfere with the conduct of the Tribal gaming operations except as may be required to perform such review functions. Auditors employed by the State gaming agency shall have unfettered access during ordinary hours of operation to inspect and copy all records, including computer log tapes, of the Tribal gaming agency and the Tribal gaming operations; provided, however, that all records of the Tribal gaming operations and Tribal gaming agency which are obtained by the State gaming agency shall be deemed confidential and proprietary financial information belonging to the Tribe and shall be protected from public disclosure by the State without the express written consent of the Tribe.

Compact, Sec. 13(b).

Detection of non-compliance in operation can also be observed during slot machine audits, specifically authorized by the MOU, Sec. 1. Additionally, the existing technical standards require that no slot machine may be installed unless it, or a prototype thereof, has been tested and approved by an independent gaming laboratory as meeting the requirements and standards of the Compact. Compact, Appendix A, Sec. 31(1). Accordingly, lack of requirement for advance approval of the system or software does not diminish oversight powers.

Where the parties to a contract have agreed to certain procedures by the clear language employed by the parties, we cannot add to that contract by interpretation. Connecticut Union of Tel. Workers, Inc. v. Southern New England Tel. Co., 148 Conn. 192, 200, 169 A.2d 646 (1961). In the instant case, the parties have agreed that the DOSR shall review and approve standards for the operation of slot machines, including standards for the CWS, in advance, but not pre-approve the system or software. Of course, this conclusion does not prohibit the agency from reviewing the system and software in advance, as the Commission has requested, and forewarning the Tribal Gaming Commission of problems, if the agency chooses to do so. This opinion only finds that approval is not required.

Therefore, and in conclusion, we believe that your agency is required to review and approve (or disapprove) the regulatory standards for the use of a Cashless Wagering System at the Mohegan Sun Casino, in advance, but not the operating system or software.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

Robert F. Vacchelli
Assistant Attorney General

RB/RFV/bjo

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