54 RI Bar J., No. 6. Pg. 11 (May/June 2006). The Current Status of Gambling in Rhode Island: The abridged version.

• Author: Guy R. Bissonnette, Esq.

Rhode Island Bar Journal

Volume 54.

54 RI Bar J., No. 6. Pg. 11 (May/June 2006).

The Current Status of Gambling in Rhode Island: The abridged version

Rhode Island Bar Journal Volume 52, No. 6, Pg. 11 May/June 2006The Current Status of Gambling in Rhode Island: The abridged version (fn1)Guy R. Bissonnette, Esq.Guy R. Bissonnette is an Associate Professor of Legal Studies at Johnson & Wales University and maintains a law office in Warwick.

To anyone who has gone into a convenience or liquor store in Rhode Island to play PowerBall, or visited the Lincoln Park or Newport Grand, (fn2) it may come as a shock that, for the most part, gambling is prohibited in this state. For the average person, the occasional news story involving Harrah's Entertainment, the Narragansett Indian Tribe, and the ongoing separation of powers struggle all seem internecine and incomprehensible. For a few, however, this is a multi-million dollar imbroglio that will, in the end, affect all Rhode Islanders.

Like all good tales of intrigue, we need to look at some Rhode Island history. From 1633 through 1842, Rhode Island operated under a Charter granted by the King of England, Charles II. Starting in 1744, until the adoption of a Constitution, the General Assembly authorized a number of lotteries that were used extensively by state government as a source of revenue to build public improvements including roads, bridges, and other public works. (fn3) It was, in essence, a voluntary tax regulated under the Charter and controlled exclusively by the General Assembly. By the 1820's, the General Assembly was delegating the supervision of these lotteries to professional managers. (fn4)

In 1843, after the Dorr rebellion, the first Rhode Island Constitution was ratified. Among the many things changed by this Constitution was the regulation of gambling. (fn5) In 1844, the General Assembly enacted in its January session "An Act in relation to Lotteries and Lottery Tickets." (fn6) This constitutional and statutory change effectively prohibited new lotteries and ended gambling as a means of funding public improvements for 130 years. (fn7)

In 1973, the Rhode Island Constitution was amended, lifting the ban on state run lotteries. (fn8) The gist of these changes once again left the General Assembly in charge of lotteries and gambling in Rhode Island, with any future expansion of gambling subject to voter approval at both the state and municipal level via referendum.

In 1974, soon after ratification of the new Constitution, the General Assembly enacted a statute creating the Lottery Commission. (fn9) This obviously spurred the creation of the state lottery, as well as the development of Lincoln Greyhound Park(fn10) and Newport Jai Alai into gaming venues. (fn11,12) Subsequently, in 1992, Video Lottery Games (video slot machines) were introduced into the mix. (fn13) By statute "video lottery games" were restricted to "pari-mutual licensee facilities" in existence on June 30, 1992. The only facilities meeting these criteria were: Lincoln Greyhound Park (now Lincoln Park) and Newport Jai Alai (now Newport Grand). (fn14,15) This statutory framework created the current gambling status quo in Rhode Island:

* Two gaming venues limited to pari-mutual betting & video slots, Newport Grand and Lincoln Park; (fn16) and

* PowerBall, Keno and other numbers games, which are available in establishments across the state, e.g. gas stations as well as liquor and convenience stores, etc. (fn17)

So, now that a broad overview of the current legal status of gambling in Rhode Island has been established, let's attempt to answer some of the more obvious gaming questions.

Q. What is the definition of a lottery?

A. The definition is much broader than you might think and has been the subject of both civil and criminal litigation. Simply put, to be a lottery, a game, scheme or plan must have three essential components: consideration, chance, and prizes. (fn18) Consideration has been defined as anything having a "pecuniary value." (fn19) Further, the courts have held that if the element of chance is the "dominant factor" in the distribution of the prize, even if the distribution is effected by the skill or judgment of the player, the game is still a lottery. (fn20) This broad definition encompasses all games of chance played for money including bingo, (fn21) card games, table games, etc.

Q. Why aren't Lincoln Park and Newport Grand considered casinos?

A. The answer involves both a definition and semantics. Both venues have "video lottery terminals" (a/k/a video slots and VLTs) and pari-mutual betting on dog and horse racing. Neither facility has gaming tables such as craps, roulette, or card games typically found in a casino. (fn22) Only video lottery terminals are permitted under the Lottery Commissions charter, and since no gaming tables are allowed, arguably, neither can be defined as a casino. However, if you define a casino in broader terms, e.g. as a venue that fosters gambling, then it is hard to not define both venues as a casino.

Q. Why can't the Narragansett Indian Tribe open a casino on their tribal lands like other Native American Tribes?

A. When the Narragansett Indians settled their land claims with the State of Rhode Island in 1978, (fn23) the tribal lands granted to them under the settlement agreement were subject to " . . . the civil and criminal laws and jurisdiction of the State of Rhode Island." (fn24) This included the Constitution of the State of Rhode Island, as amended, as well as all other Rhode Island law. The effect of this provision is that the statutory restrictions on gambling previously discussed have prohibited the creation/expansion of gambling on Narragansett Indian Tribal land in the absence of General Assembly as well both state-wide and local voter (Town of Charlestown) approval. Or, at least this is the position taken by the State of Rhode Island. While the Narragansett Indian Tribe disputes the assertion of local and state authority over their tribal lands, and in fact there is pending litigation over this very issue, (fn25) the development of gambling on tribal lands, in the interim, has effectively been prevented.

Q. Why have the Narragansett Indian Tribe and Harrah's Entertainment joined forces to build a casino in West Warwick, Rhode Island?

A. Clearly, the attempt to place a casino on non-tribal land subjects the proposal to all Rhode Island law. So why West Warwick? There appear to be several reasons. First, it's strategic. West Warwick is far enough from the Connecticut boarder to physically minimize the competition from the Foxwoods and the Mohegan Sun casinos. In addition, it is located relatively close to the state's metropolitan center, greater Providence, as well as being a short distance off Interstate Route US-95 for those traveling south - to intercept those who have been traveling to the Connecticut casinos. (fn26) Secondly, the Town is in desperate financial shape and is highly motivated politically to support the proposal. Lastly, Harrah's has the financial ability to take the long view necessary to make the project happen.

The most recent efforts of the Narragansett Indian Tribe and Harrah's Entertainment have succeeded in garnering the necessary political support; but have failed to place the proposal(s) on the ballot, and before the voters of the State of Rhode Island. (fn27)

Q. Why has the gambling issue been so contentious between the Governor and the General Assembly?

A. The simple answer to this question is power. Or, more accurately, the separation of power between these branches of government. The recent struggles between the Governor and General Assembly over the power to control gambling began historically with the "Tribal State Compact" signed by the Narragansett Tribe and then Governor Almond on August 29, 1994. (fn28) The agreement between the Tribe and the State would have permitted development of a gaming facility on the tribal lands in Charlestown, Rhode Island. Unfortunately for the Governor and Tribe, the Rhode Island Supreme Court reviewed the Constitutional powers conferred on both the Governor and General Assembly and abrogated the agreement. The Court reaffirmed the General Assembly's sole and exclusive power to control gambling in the State of Rhode Island. (fn29) The limited powers of the Governor were once again reaffirmed in 2000 when the Rhode Island Supreme Court...