Tribes to pay Conn. $25m in slot accord

Associated Press / August 27, 2009

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HARTFORD - Connecticut officials said two American Indian tribes will pay the state $25 million in slot revenues to compensate for promotions that allowed gamblers to use slot machines for free.

Attorney General Richard Blumenthal and the state Division of Special Revenue announced the settlement yesterday.

At issue were promotions by the Mashantucket Pequot Tribal Nation, which runs Foxwoods Resort Casino, and the Mohegan Tribe that runs the Mohegan Sun. State officials said Foxwoods offered some patrons coupons or electronic credits through a program called Free Play, and the Mohegan Sun had a similar promotion called eBonus.

The state said that 25 percent of the casinos’ gross operating revenues from slot machines should go to the state and that the tribes were required to contribute the money under an agreement in the early 1990s that allowed them to operate casinos in the state.

No money changed hands during the promotional slot use, but Blumenthal maintained that the state was still owed money for the transactions.

“It is used to gamble as a substitute for actual cash,’’ he said. “It is, in effect, money that people would otherwise spend out of their own pockets, so, in effect, they are wagering and it is effectively revenue.’’

The state started vying for a cut of revenue when the promotions began in 2006. Negotiations wrapped up over the past few days.

Bruce “Two Dogs’’ Bozsum, chairman of the Mohegan Tribal Council, said in a statement yesterday that the council was pleased the issue had been resolved.

A spokesman for the Mashantucket Tribe, Jackson King, said the agreement was in everyone’s best interest.

The settlement funds will come from an escrow account that includes money set aside monthly since the start of the promotions.

The programs at Foxwoods and Mohegan Sun bring in about $4 million and $2 million a month, respectively, Blumenthal said.

The money should come to the state within days, he said. It will go into Connecticut’s general fund.