Press release: ATTORNEY GENERAL AND EXECUTIVE DIRECTOR OF DSR ANNOUNCE $25 MILLION SETTLEMENT WITH TRIBES OVER DISPUTED SLOT REVENUE
Attorney General Richard Blumenthal and Paul A. Young, executive director of the Division of Special Revenue (DSR), today announced identical settlements with the Mashantucket Pequot and Mohegan Tribes that would provide $25 million in slot revenue to the state, as well as future payments.
            The settlements would resolve the state’s lawsuit against the Mashantucket Pequot Tribe seeking slot revenue collected through a promotional program known as “Free Play†in which Foxwoods provided certain patrons coupons or electronic credits that permit them to play slot machines free up to the value of the credits.
            The Mohegan Tribe later initiated a similar free play-type promotional program called “eBonus.â€
            Blumenthal said, “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. Even more than money, this agreement shows we can reach common ground through government-to-government talks. The tribes have commendably agreed to a settlement that serves all interests — enabling all to benefit from successful promotional programs.
            “I respect and appreciate the strong tribal commitment to cooperation, which enabled our coming together. Clearly we have more in common than in conflict. We avoid a lengthy court battle — with millions of dollars frozen in bank accounts — and enable more jobs, more competitive casinos and more financial opportunities.â€
            Young said, “We appreciate the Tribes willingness to work in partnership with the state to reach an agreement that will enable us all to move forward. This agreement will uphold the terms of the Tribal Gaming Procedures and Compact in addition to allowing the Tribes to compete in a competitive market place.â€
The state contended that the coupons or credits constituted wagers under the Memorandum of Understanding regarding slot machines between the state and the tribe, and that Free Play coupons actually played on the slot machines should be calculated in the tribe’s monthly contributions to the state (25 percent of the “gross operating revenues†from the operation of slot machines).
 Under separate and similar settlements, the tribes will collectively pay the state approximately $25 million in slot revenue from the tribes’ promotional programs that has been placed in escrow monthly since the inception of the programs. The tribes have also agreed to continue to pay the state a portion of these promotional proceeds each month.
 Going forward, if the aggregate amount of Free Play or eBonus coupons or credits played on the slot machines in any month exceeds 5.5 percent of the tribes’ gross operating revenue from their slot machines, the tribes will pay the state an amount equal to 25 percent of the face amount of the coupons or credits used in that month that exceeds 5.5 percent of the gross operating revenues. The payments will be included in the tribes’ monthly slot contributions.
In December 2006, the state sued the Mashantucket Pequot Tribe in state court seeking a declaratory judgment and damages. The Mashantucket Pequot Tribe entered into an agreement with the state to deposit in an escrow account 25 percent of the face value of all Free Play coupons or credits used on its slot machines since the inception of the program to the present.Â
 The state and Mohegan tribe did not file actions against each other, but the Mohegan Tribe has similarly agreed to place its eBonus revenue in escrow, and abide by the terms of any settlement agreement between the state or the Mashantucket Pequot Tribe or any court order.
