December 12, 2002
COMPACT AND SLOT AGREEMENT AMENDMENTS
By: Veronica Rose, Principal Analyst
You asked about the circumstances and process for amending the compacts and slot machine agreements with Connecticut's Indian tribes.
The Interior Department's procedures governing gaming at the Foxwoods casino and the Mohegan state-tribal gaming compact contain identical language with regard to termination and amendment or modification. The provision governing termination reads as follows: “[o]nce effective this compact shall be in effect until terminated by written agreement of both parties” (§ 17 ). The amendment and modification provision (§ 17) reads as follows: “[t]he terms and conditions of this compact shall not be modified, amended or otherwise altered except by written agreement of both parties. . . .” The amendments take effect when the U. S. Interior Secretary publishes notice of them in the Federal Register (§17(c)). Under a 1994 law, the legislature must approve a state-tribal compact or an amendment to one, but the law took effect on June 20, 1994, after the Interior Department's procedures for Foxwoods and Mohegan compact took effect.
The slot machine agreements (memoranda of understanding) do not contain any amendment or modification clause. The termination clause reads as follows:
In the event that any change in State law is enacted to permit the operation of video facsimiles or other commercial casino games by any other person or any other person within the State lawfully operates video facsimile games or other commercial casino games, the Tribe shall not be bound by the provisions of the Memorandum of Understanding so long as it does not claim any right to operate video facsimile games by virtue of this Memorandum of Understanding, but the Tribe may thereupon assert any rights which it may otherwise have under the Procedures; provided, however, that in such event neither party shall be bound by any of the provisions hereof nor shall either party be barred from taking any position inconsistent with the Memorandum of Understanding (p. 3).
The Mashantucket Pequot slot agreement has been amended twice. The first amendment modified the payments to the state (April 30, 1993); the second amendment allowed the Mohegans to operate casino gaming (April 25, 1994). Both parties agreed to negotiate the amendments.
State law requires both houses of the legislature to approve a state-tribal compact or an amendment to one. But the law does not specify any legislative procedures. This law took effect on June 20, 1994.
The Mashantucket Pequot proposal for casino gaming was the subject of litigation and gaming procedures were eventually imposed by the U. S. Secretary of the Interior under the provisions of the federal Indian Gaming Regulatory Act. Governor Weicker negotiated a compact with the Mohegan tribe but did not submit it to the legislature. He vetoed legislation requiring the submission of compacts to the legislature and signed the agreement with the Mohegans on the same day (April 25, 1994).
The attorney general, in an opinion dated May 18, 1994, decided that absent legislation, the governor could enter into a compact without submitting it to the legislature. He also stated that certain parts of the Mohegan agreement, such as the transfer of state land, required legislative action.
The legislature later overrode the governor's veto and enacted the compact approval law that is currently in place.
Under current law, the governor must file a compact or amendment with the Senate and House clerks within 10 days after it is executed. If filed during a regular session, the legislature has until its adjournment to approve or reject a compact or amendment. If not filed during a regular session, the legislature has until adjournment of (1) the next regular session or (2) a special session convened to take action on the measure. If the legislature does not act by adjournment, the compact or amendment is rejected and cannot be implemented.
If the governor files a compact or amendment within 30 days of the end of a regular session, the legislature can either:
1. convene in a special session and vote within 30 days or
2. vote on it within the first 30 days of its next regular session.
The legislature has until the end of either 30-day period to vote before the measure is considered rejected (CGS § 3-6c).
The original Pequot memorandum was negotiated and designed to suspend the moratorium on slot machines imposed by the federal procedures governing casino gaming at the Foxwoods Casino. Section 3 of the procedures authorizes slot machines. But Section 15(a) places a moratorium on them until:
1. it is determined by agreement between the Tribe and the State or by a court of competent jurisdiction, that by virtue of the existing laws and regulations of the State the operation of video facsimiles of games of chance would not be unlawful on the ground that the Tribe is not located in a State that permits such gaming. . . or
2. the existing laws or regulations of the State are expressly amended to authorize the operation of any video games of chance for any purpose by any person, organization or entity (Mashantucket Pequot Gaming Procedures, p. 53).
The Pequots negotiated the first memorandum of understanding with the state on January 13, 1993. It gave them the exclusive right to operate slot machines in return for a monthly contribution to the state of 25% of gross slot machine revenue. If the tribe's contribution fell below
$100 million in any year, the rate would increase to 30% in order to reach a minimum $100 million.
When the Mohegans won federal recognition and decided to open a casino, the Pequots renegotiated their agreement with the state. The result is that both the Mohegans and Pequots have identical agreements with the state. Each tribe must contribute 25% of gross slot machine revenue to the state monthly. If either tribe's contribution falls below
$ 80 million in any year, its rate increases to 30% in order to ensure a combined $160 million minimum annual contribution.
Circumstances Under Which the Tribes Can Stop Payments
Each tribe agrees under its memorandum of understanding to make slot machine payments to the state “so long as no change in State law is enacted to permit the operation of video facsimiles or other commercial casino games by any other person and no other person within the State lawfully operates video facsimiles or other commercial casino games. . . .”
In light of the above, it appears that the tribes could terminate their payments to the state if the state negotiates a compact allowing another tribe to operate slot machines. Faced with this situation in 1994, the Pequots amended their memorandum to include the following language:
WHEREAS, the Mohegan Tribe is now federally recognized and the State may be required to negotiate a gaming compact with the Mohegan Tribe which could relieve the Mashantucket Pequot Tribe of its obligation to contribute to the state and lead to renewed litigation between the parties hereto regarding the effect of the moratorium set forth in section 15(a) of the Mashantucket Pequot Gaming Procedures; and whereas the parties desire to avoid renewed litigation and to amicably resolve the existing uncertainties in a manner consistent with the original intent of the Memorandum. . . the Mashantucket Pequot Tribe is prepared to maintain its obligation to contribute to the State so long as the Mohegan Tribe enters into a similar arrangement. . . (Second Amendment to Memorandum of Understanding p. 1).
POSSIBLE OUTCOMES OF REQUEST BY NEW TRIBE FOR SLOT MACHINES
If a newly recognized federal tribe negotiates a compact with the state, it appears likely that the tribe would also seek a slot agreement with the state similar to the Pequot and Mohegan agreements. But there is no requirement in the current agreements for either tribe to amend its agreement with the state to accommodate newly recognized tribes. Assuming they both agree to do so, the outcome is in no way predetermined. Both the rate and minimum annual contribution could be modified.
In commenting on the circumstances under which the Mashantucket Pequots could terminate payments, the attorney general said in 1994 that the tribe is obliged to make the payments as long as it operates slot machines on the basis of the memorandum of understanding. But if the legislature authorized slot machines, the tribe could claim that its right to operate slot machines derived from the gaming procedures. If “the operation of the machines derives from the procedures then the obligation is extinguished.”