Connecticut Questions Legality of Foxwood's Online Game

26 July 2005

Foxwoods Casino in Connecticut is in discussions with the state's attorney general and other officers of the state regarding the legality of a new product the casino plans to launch in August.

The new game, called "PlayAway," is an expansion of the casino's existing keno game that allows patrons to purchase game tickets at the casino and retrieve the results at home via Foxwoods' Internet site. Tickets may only be purchased and redeemed at the casino by adults over the age of 21, and no financial transactions can be made over the Internet. However, Connecticut's attorney general and Department of State Revenue Services have taken issue with the site and have persuaded Foxwoods to temporarily shut it down.

Foxwoods , which soft-launched the Internet site for PlayAway on July 18 and began selling tickets for the game in its casino, insists that the site offers games and not gambling. The results of the $1 tickets are predetermined by a computerized drawing at Foxwoods, so nothing the players do from their computers can in anyway impact whether the tickets win or lose.

The tickets are very much like instant scratch tickets in that the result has already been decided at the time of the sale. But instead of scratching the tickets, players go home and enter the ticket codes on their computers to find out whether they've won. Games like slots, blackjack and video poker are offered through the site, but the outcomes of the games have no impact on whether the player wins any money.

Foxwoods representatives met with Connecticut Attorney General Richard Blumenthal on July 20 to discuss concerns that the site violates the Wire Act and provides minors with easy access to gambling.

The casino removed the service on the 22nd, but indicated that it only did so due to misunderstandings on behalf of Connecticut's Department of Revenue Services.

Paul Young, the executive director of Connecticut's Department of Revenue Services, ordered Foxwoods to cease the PlayAway service because it is "not in compliance" with a requirement that new games receive review and approval by the Department's Division of Special Services before being introduced to the public.

Foxwoods, however, points out that it forwarded letters from independent testing lab Nick Farley and Associates to the Department of Revenue Services and its special services division on April 21 and on May 27. The letters from Farley and Associates assured the integrity of the PlayAway system, explained the operation of the game (that "the Web site merely provides an entertaining alternative display for the Keno results") and explained that PlayAway is not a new game that would require approval but is actually a new feature to its previously approved XpertX Keno game. The letters also described the benign use of the Internet to retrieve results.

Foxwoods conceded, however, that both Young and Blumenthal raised some concerns that need to be addressed, and is adding language to its site clarifying that PlayAway is not actually Internet gambling. It is also adding a new Web site feature allowing customers to retrieve results without having to play the online games.

The legality of the service was not a concern of the letter sent to the state's Department of Revenue Services, and it appears that the July 20 meeting has eased Blumenthal's concern that PlayAway violates the Wire Act because

Gambling law expert Anthony Cabot of Las Vegas firm Lewis & Roca explained to the Boston Globe that, "[PlayAway] is clearly within the bounds. Once you buy the ticket, you can't alter anything. Everything happens in the casino."

Cabot also said that PlayAway is actually quite similar to a New Jersey Lottery product called eGames, which lets the purchaser of tickets play online games like Tetris to reveal whether the ticket is a winner.

Although the Department of Revenue Services also alleges that PlayAway violates the Children's On Line Privacy Act, it appears that its reasons for alleging so are because the PlayAway Web site offers a free demonstration of its games. Foxwoods categorically denies that this is a violation, and it remains to be seen how this issue will be resolved.

Foxwoods says that the Department of Revenue Services has all of the information it needs to "expeditiously review the game" and it intends to re-launch PlayAway no later than Aug. 2, the originally planned launch date.

Bradley Vallerius

Articles by Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials. Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

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