Legal or not? It can be confusing

Jul 26, 2005 9:48 AM

When it comes to gaming, sometimes it takes the wisdom of Solomon to determine whether a practice or a device is legal.

Just ask the folks who operate the Foxwoods Resort Casino for the Mashantucket Pequot Indians, believed by many in the industry to be one of the most successful casinos anywhere.

Always looking to stay a step ahead of the industry, Foxwoods introduced a new promotion called "PlayAway," that offered the opportunity to its customers to play slots or card games from the privacy of their homes. Players would deposit their money at Foxwoods and then would play and check the results online.

The promotion was sent to the gaming commission for review and passed muster. In a letter to the Division of Special Revenue, gaming commission Chairman George Henningsen wrote that the game was properly reviewed and approved.

After all, said Foxwoods, although the Internet is used in the game "all the betting takes place at Foxwoods."

But, use of the Internet for the promotion was enough to throw up a red flag for Atty. Gen. Richard Blumenthal who immediately jumped into the fray by charging that "PlayAway" violated federal law. He said the game was a magnet for minors and had to be stopped.

The state regulators agreed and ordered the casino to shut down the operation.

Blumenthal said he felt that Foxwood’s own marketing for the game contradicted their argument that the activity was legal.

The commission met with Blumenthal to review his objections that fell primarily on promotional material. As such, regulators and the casino agreed to revise the promotion and its advertising. The game will be revived next week.

A similar disagreement developed recently in South Carolina where an argument erupted over the question: When is a slot machine not a slot machine?

The dilemma facing gaming authorities developed when a Texas company placed a device called "a sweepstakes terminal" in a number of outlets. The feature used by the sweepstakes machines is that the player buys a long distance phone card or Internet time card at a business that has these sweepstakes terminals available.

The cards include minutes for long-distance or Internet service, as well as free sweepstakes points. These points have no value except to permit the customers to play the machines.

Points won on the machines cannot be used to continue playing. They must be redeemed for cash or merchandise.

The manufacturer insists they are selling cards and that the machine play is incidental to the transaction since the buyers are not required to play the machines. Also, they argue, "there’s nothing in the state law that prohibits sweepstakes tickets or machines from paying out cash."

State officials disagreed, however, and closed down the operation.

"If they look like a duck and quack like a duck," noted one observer, "they must be illegal slot machines."