Attorney General: Thomas Rotunda, Executive Director, Division of Special Revenue, 1999-014 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

November 19, 1999

Thomas Rotunda, Executive Director
Division of Special Revenue
555 Russell Street
Newington, CT 06111

Dear Mr. Rotunda:

You ask us whether the Division of Special Revenue (DOSR) may approve a contract between Autotote Enterprises, Inc., the licensee of the Connecticut Off-Track Betting System, and Wyvern International, Ltd., which would provide for simulcasting and common pool wagering on thoroughbred races in Australia pursuant to Conn. Gen. Stat.  12-571(a)1. Executive Director and Gaming Policy Board approval for such common pool wagering is required by Conn. Gen. Stat.  12-572(g).2

We are asked to focus on two unsettled questions:3 (1) whether Conn. Gen. Stat.  12-571(a), which allows OTB betting on races "held within or without the state" authorizes betting on races run in foreign countries; and (2) whether such activity would be prohibited by the Federal Wire Communication Act or the Interstate Horseracing Act of 1978.

For the following reasons, we believe that Conn. Gen. Stat.  12-571(a) authorizes such betting, and the activity is not prohibited by the above mentioned federal statutes. Accordingly, if you find the proposal otherwise acceptable, then the contract may be conditionally approved as described below.

Concerning the first issue presented, Conn. Gen. Stat.  12-571(a) authorized the DOSR, when it owned the system, to conduct systems of off-track betting on horse races "held within or without the state," and, after the sale of the system to Autotote Enterprises, Inc., that purchaser was likewise authorized to establish and conduct a system of off-track betting on races "held within or without the state." The terminology in issue is not defined by State statute. In such circumstances, the canons of statutory construction provide that the words should be construed according to the common approved usage of the language. Conn. Gen. Stat.  1-1(a); Caldor, Inc.v. Heffernan, 183 Conn. 566, 570, 440 A.2d 767 (1981). Employing this rule, it is clear that the phrase in question is not limited, geographically, to one nation. "Without" means on the outside. Webster's II, New Riverside University Dictionary (1988). We have been unable to find a Connecticut case on point, but courts in other states, likewise, have found that the phrase, as used in statutes, is not limited to the United States; rather, it is broad enough to include all the world. Hite v. Keene, 137 Wisc. 625, 626, 119 N.W. 303 (1909); Maryland Cas. Co. v. Brown, 110 S.W.2d 130, 132 (Tex. Civ. App. 1937).

The appropriateness of this conclusion is confirmed by the legislative history of the enabling act. Off-Track Betting was originally approved by the Connecticut General Assembly in 1971. See 1971 Conn. Pub. Acts. No. 71-865, Sec. 15. That Act authorized the Commission on Special Revenue, predecessor to the DOSR, to "establish and conduct systems of off-track betting on races held within or without the state." Id. In moving for adoption of the bill in the State Senate, Senator Strada remarked:

It is further hoped that, our off-track betting system, will be as successful as the New York system appears to be after only a few trial months. And as successful as many other over-seas off-track betting systems and that our off-track betting system will be able to take advantage of the race-track in other states and other countries.

14 S.Proc., 1971 Sess. Pt. 7 at p. 3388.

This is a strong indication of legislative intent. Winchester Woods Associates v. Planning & Zoning Commission, 219 Conn. 303, 310-11, 592 A.2d 953 (1991); see also Manchester Sand and Gravel Co., Inc. v. Town of South Windsor, 203 Conn. 267, 275, 524 A.2d 621 (1987). Therefore, we believe that this statute authorizes off-track betting on horse races run in other countries, as well as other states.

As for your second question, we believe that the federal statutes cited are not applicable to the present issue. The Federal Wire Communication Act is a statute with criminal penalties which prohibits wire communication of illegal betting information. 18 U.S.C. 1084.4 Telephone line circuits, interstate in character, in any part of the system, can trigger applicability of this law. See, e.g., United States v. Yaquinta, 204 F.Supp. 276 (N.D.W.Va. 1962). The law, however, explicitly exempts certain lawful betting information in interstate or international transmission:

(b) Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.

18 U.S.C.  1084(b).

Accordingly, it has been held that this law does not apply to pari-mutuel betting lawful under state law, as in the instant case. See United States v. Donaway, 447 F.2d 940, 944 (9th Cir. 1971). Pari-mutuel horserace betting, contemplated in the proposal in question in this opinion, is permitted in both Connecticut (Conn. Gen. Stat.  12-572) and, your staff advises, at the Australian tracks in issue in this opinion.

Nor does the Interstate Horseracing Act of 1978 apply. That statute prohibits interstate off-track betting absent, inter alia, the agreement of the effected horseracing association and horsemen's group. 15 U.S.C.  3004.5 The law creates a private cause of action for damages in favor of the host racing association, horsemen's group and State. 15 U.S.C.  3005, 3006. This law is not applicable either because it applies only to interstate off-track wagers. "Interstate off-track wager" is defined in the Act as "a legal wager placed or accepted in one State with respect to the outcome of a horserace taking place in another state" 15 U.S.C.  3002(3) (Emphasis added). "State" means each State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. 15 U.S.C.  3002(2). The emphasized portion of the definition demonstrates that the Act applies only to horseraces conducted in a State, and Australia is not a State as defined by the Act. Regulation of international off-track betting is otherwise left to state law. Atlantic City Racing Ass'n. v. Attorney General of the State, 189 N.J. Super. 549, 555, 461 A.2d 178 (1983), aff'd, 198 N.J. Super. 247, 486 A.2d 1261 (1983), rev'd. on other grounds, 98 N.J. 535, 489 A.2d 165 (1985) (no preemption).

Our conclusions regarding these federal laws are not necessarily the final disposition of the questions in all contexts. These topics are subject to federal agency jurisdiction and court disposition which may reach a contrary result in any given context or challenge. Also, the law in this area is rapidly evolving, and this Office does not have criminal jurisdiction in this area. Conn. Gen. Stat.  3-125. Consequently, any approval issued by your agency should be expressly contingent on compliance with applicable state and federal law and any applicable future legal determinations over which your agency, and this Office, have no power to resolve in advance.

For all of the above stated reasons, we believe that Conn. Gen. Stat.  12-571(a) permits the international off-track betting proposed and that, in general, it is not prohibited by the Federal Wire Communication Act or Interstate Horseracing Act of 1978. Therefore, the contract may be conditionally approved by you and the Gaming Policy Board if it is found to be otherwise acceptable.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Robert F. Vacchelli

Assistant Attorney General

RB/RFV/bjo


1 Conn. Gen. Stat.  12-571(a) provides:

(a) The executive director of the Division of Special Revenue shall enter into negotiations with a person or business organization for the award of a contract of sale of the off-track betting system including, but not limited to, the assets and liabilities of the system and the right to operate the system. Such contract of sale shall authorize the purchaser of the system to establish and conduct a system of off-track betting on races held within or without the state pursuant to the provisions of this chapter. All proceeds derived from such sale shall be deposited as provided in section 39 of public act 93-332. Until the effective date of transfer of ownership of the off-track betting system, the executive director shall establish and conduct systems of off-track betting on races held within or without the state pursuant to the provisions of this chapter. It is hereby declared that off-track betting on races conducted under the administration or regulatory authority of the division in the manner and subject to the conditions of this chapter shall be lawful notwithstanding the provisions of any other law, general, special or municipal, including any law prohibiting or restricting lotteries, bookmaking or any other kind of gambling, it being the purpose of this chapter to derive from such betting, as authorized by this chapter, a reasonable revenue for the support of state government and to prevent and curb unlawful bookmaking and illegal betting on races.

2 Conn. Gen. Stat.  12-572(g) provides:

(g) The division or any person or business organization operating an off-track betting system, with the approval of the board, may combine wagers placed within such off-track betting system with similar wagering pools at the facility where a racing program is being conducted, regardless of whether such facility is located within or without the state. Such pari-mutuel wagers shall be combined in such form and manner as the executive director may determine to be in the best interests of the off-track betting system established pursuant to the provisions of section 12-571. Notwithstanding the provisions of subsection (c) or (d) of this section to the contrary, the division or any person or business organization operating an off-track betting system and conducting wagering on racing events held without this state, with the approval of the board, may distribute to the holders of winning tickets who have placed wagers in said combined pools such sums as may be deposited in said combined pari-mutuel pools, less the same percentage of the total deposits of such combined pools as is established at the facility where such racing program is conducted plus the breakage to the dime, as shall be determined by the executive director with the approval of the board.

3 Although the questions have never been addressed by this Office in an opinion, your background material shows that the DOSR has allowed common pool wagering via the Ontario Jockey Club in Canada in the past.

4 18 U.S.C.  1084 provides, in pertinent part, as follows:

(a) Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned nor more than two years, or both.

5 15 U.S.C.  3004 provides, in pertinent part, as follows:

(a) Consent of host racing association, host racing commission, and off-track racing commission as prerequisite to acceptance of wager

An interstate off-track wager may be accepted by an off-track betting system only if consent is obtained from --

(1) the host racing association, except that --

(A) as a condition precedent to such consent, said
racing association (except a not-for-profit racing association in a
State where the distribution of off-track betting revenues in that
State is set forth by law) must have a written agreement with the
horsemen's group, under which said racing association may give
such consent, setting forth the terms and conditions relating thereto;
provided,

(B) that where the host racing association has a contract
with a horsemen's group at the time of enactment of this chapter
which contains no provisions referring to interstate off-track
betting, the terms and conditions of said then-existing contract
shall be deemed to apply to the interstate off-track wagers and no
additional written agreement need be entered into unless the parties
to such then-existing contract agree otherwise. Where such
provisions exist in such existing contract, such contract shall govern.
Where written consents exist at the time of enactment of this chapter between an off-track betting system and the host racing association providing for interstate off-track wagers or such written consents are executed by these parties prior to the expiration of such then-existing contract, upon the expiration of such then-existing contract, the written agreement of such horsemen's group shall thereafter be required as such condition precedent and as a part of the regular contractual process, and may not be withdrawn or varied except in the regular contractual process. Where no such written consent exists, and where such written agreement occurs at a racing association which has a regular contractual process with such horsemen's group, said agreement by the horsemen's group may not be withdrawn or varied except in the regular contractual process;

(2) the host racing commission;

(3) the off-track racing commission.


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