Free Play Promotion Costs Connecticut Casinos $25 millionSeptember 4, 2009 8:00 am
A promotional practice by casinos of offering free slot machine play to patrons has resulted in a $25 million court action in favour of the cash strapped state of Connecticut, which, as The Hartford Courant reported, “offered a little good news for Connecticut, which is facing a two-year, $8.5 billion budget deficit.”
The promotion is usually used as a means of rewarding loyal customers, with the casinos footing the bill for the promotion. However, the state of Connecticut had taken a very dim view of the practice which, the Attorney general Richard Blumenthal said, “is used to gamble as a substitute for actual cash. 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 two Indian tribes who had been issueing free slot coupons were the Foxwoods Resort Casino, owned by the Mashantucket Pequot Tribal Nation, and the Mohegan Sun, owned by the Mohegan Tribe. In their agreement 25% of slot revenue was to be payed to the state by the tribes, but the free play promotions which were introduced in 2006 became a source of contention between the parties, with the state demanding a cut of the $6 million in increased revenue per month as a result of the bonus.
Bruce “Two Dogs’’ Bozsum of the Mohegan tribe and Jackson King from the Mashantucket Tribe both agreed a settlement of the issue was in all parties best interest and said the money would be paid within days from the promotion accounts.
The ruling which now considers free play as revenue could have implications across the country as other states seek to emulate Connecticut’s lead. Analyst Frank Gully commented: “Certainly, the fact that these two tribes settled with the state shows that the free play is essential for raising revenue at casinos. Now we will just have to see if other states follow the lead of Connecticut and go after casinos in their states for this free play revenue.”