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Law Suit Forces Casinos to Settle for $25 Million

Casino News - August 28th, 2009 - Written by Bonnie

foxwoods casinoA sigh of relief is heard from two of Connecticut's casinos, both facing a $8.5 million budget deficit. It seems there was a misunderstanding in regards to a promotional game that was allowing participants to experience the game free of cost. Two tribes that run operations of the Foxwoods Resort Casino and Mohegan Sun have come up with a settlement agreement to pay $25 million towards the slots revenue. A law suit was filed against the Mashantucket Pequot Tribe, whom actually collected funds through the running of a promotion referred to as "Free Play". During the promotional period, Foxwoods issued certain players a number of coupons and or credits, which could be used to play slot machines for free, up to the value of the coupon or credit voucher.

Although an agreement has been put into place, it still requires legislative approval due to the size of the settlement. Session is underway today, and lawmakers are expected to vote on the settlement, which is backed by Gov. M. Jodi Rell. The agreement also includes future payment arrangements, due to the fact that both casino locations are still offering that particular promotion.

This is not the first time this promotional game has created legal issues. In 2006,  Attorney General Richard Blumenthal filed suit against the Mashantucket Pequot Tribe, over the same promotion. The Mohegan Tribe was not sued but they agreed to obide by the terms of the said agreement.

The state decided that the vouchers act as a wager and therefor should be calculated as part of the Tribes contributions to the state. Twenty-five percent of the gross revenues to the state came from the slot machines operating throughout the casino.

"This agreement is huge and historic — a tremendous precedent resolving disputed slot revenue significant to the state's solvency and symbolizing our shared stake in financial success," Blumenthal said.

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