The Wrong Amendment

Rhode Islanders have a pivotal decision to make in November - the casino amendment. And to make that decision, we should clarify what's at stake. It's not just about "broken promises," as the Narragansett Indians would have us think by playing the guilt card, nor is it just about one company benefiting at Rhode Island's expense, as 'Save Our State' claims by attacking Harrahs. No, the issue at stake is far more fundamental - it's about making bad law. Just read carefully the proposed Constitutional Amendment:

Proposed Section 23 [of Article VI]. Resort Casino - Notwithstanding sections 15 and 22 of this Article, and provided that a majority of the electors of the Town of West Warwick have voted to approve this amendment, the establishment of a resort casino and games located therein is authorized in the Town of West Warwick. The resort casino shall be privately owned and privately operated by a business entity established pursuant to Rhode Island law by the Narragansett Indian Tribe and its chosen partner, which entity shall be: (i) legally distinct and separate from the Narragansett Indian Tribe, (ii) subject to the laws of the state of Rhode Island, including regulation and taxation, and (iii) required in its organizing documents to expressly waive any sovereign immunity relating to any and all matters of the resort casino, including compliance with and enforcement of the laws of the state of Rhode Island, and the regulation and taxation thereof. The per annum tax rate shall be established by the general assembly with all of such tax proceeds to be dedicated to property-tax relief, as prescribed by statute.

It's difficult to read this and not hold one's nose. Naming specifics like West Warwick and the Narragansett Indians is clearly untenable for a document that defines the guiding principals of our laws. Yet the casino amendment is offered as the workaround to a Constitutional conflict. How did we get here?

During the early 1970s, in another incarnation of the State's endless search for additional revenue, the idea of a state lottery took root. After all, lotteries were already widely used. Indeed, Rhode Island held a lottery - to fund construction of a bridge on Weybosset Street - as far back as 1744! So the idea had been around and well tested. Thus in 1973, a limited Constitutional Convention approved the text of what is now known as Article 6, Section 15, of the Rhode Island Constitution:

Section 15. Lotteries. -- All lotteries shall be prohibited in the state except lotteries operated by the state and except those previously permitted by the general assembly prior to the adoption of this section, and all shall be subject to the proscription and regulation of the general assembly.

Thus began the era of the state-run lottery, and in the 30 years since it has grown to become our third largest source of revenue. Along the way, however, we've hit a couple of bumps.

Up until 1981, the term "lottery" hadn't been legally tested and defined in Rhode Island State Law, but a landmark case - "Dennis J. Roberts II, Attorney General [of Rhode Island] et al. v. Communications Investment Club of Woonsocket et al." - caused the RI Supreme Court to rule "that a 'lottery' proscribed in either a state constitution or statute is defined as a scheme or a plan having three essential elements: consideration, chance, and prize." And further, "In deciding whether the element of chance is present, we adopt, as have most jurisdictions which have faced this issue, the 'dominant factor' doctrine, under which a scheme constitutes a lottery when an element of chance dominates the distribution of prizes, even though said distribution is affected to some degree by the exercise of skill or judgment." Thus from 1981 onward, any gaming or business scheme in which "chance" dominated the possible outcomes could be considered a "lottery," with all the attendant legal obligations.

Fast-forward a dozen years, when the idea of building a casino began to gain steam, and state-wide debate led to another amendment to Article 6, Section 22, adopted in 1994:

Section 22. Restriction of gambling. -- No act expanding the types of gambling which are permitted within the state or within any city or town therein or expanding the municipalities in which a particular form of gambling is authorized shall take effect until it has been approved by the majority of those electors voting in a statewide referendum and by the majority of those electors voting in a referendum in the municipality in which the proposed gambling would be allowed.

What's intriguing about this amendment is the word "gambling." Its use seems to indicate that "gambling" was viewed as somehow distinct from a "lottery." Otherwise, why add a new section and not just revise Section 15? Nonetheless, in-state gambling concerns were beholden to Section 15 and required to operate accordingly. "Lottery" equaled "gambling."

Fast forward another ten years, when Governor Carcieri asked the Rhode Island Supreme Court for an advisory opinion regarding the first proposed casino referendum. In its opinion, the Supreme Court echoed its 1981 ruling by finding "a casino to be a lottery under the "dominant factor" doctrine." The Supreme Court further opined, "the casino proposed by the 2004 Casino Act would violate Article 6, Section 15, because Harrah's, and not the state, would retain 'operational control' over the lottery facility." Thus "lottery" equals "gambling" equals "casino."

And so here we are with a proposed amendment to the State Constitution that grants a specific group in a specific town what amounts to immunity from Section 15, Article 6 of the State Constitution. And why? Because "lottery" equals "gambling" equals "casino," which flows directly from the Supreme Court's 1981 ruling that cites the "dominant factor" doctrine. Quite a tight little knot, but there is a better alternative to the proposal before us, an alternative that would help put some badly needed rationale into the meaning of "gambling" as used in section 22.

In addition to the "dominant factor" doctrine, a second legal doctrine can be applied to schemes of chance. It's called the "pure chance" doctrine. Though less frequently invoked, it is well established in law, and "under this approach, for a scheme to be a lottery, it must be one solely based on chance. The exercise of any skill by a participant in the scheme removes the scheme from within the definition of a lottery." Can anyone realistically argue that a player's skill impacts the result of playing Rhode Island's "Where else can you buy a dream for a dollar" lottery? No. The same could be said for slot machines. But much beyond that and it gets increasingly difficult to deny the impact of skill. At the far end of the spectrum, consider poker, where skill clearly distinguishes winners from losers. Should poker be considered a "lottery?"¹

Given the tightrope we're walking between "lottery," "gambling," and now "casino," the proposed section 23 does have a certain twisted logic, but it would seem far more logical to amend Sections 15 and 22 of Article 6; amend them by applying the "pure chance" doctrine to define "lottery," and the "dominant chance" doctrine to define "gambling." Once done, "casino" would attend to itself. Granted, making changes to these sections would require some statutory reshuffling to define which games fit where and the regulations and fees for running them, but that's where the shuffling should happen - in specific statutes - not in our declaration of principles, not in the Constitution itself.

RI has long been known as a "funky little state" where corruption is almost a sport. On November 7th we have an important choice to make. In so far as our Constitution is the bedrock of Rhode Island's laws, then in the event the proposed amendment should pass, our "Corruption" will become etched in stone. That would be tragic; it would confirm to everyone watching that it's business as usual in Rhode Island. But if we're ready for honest reform, then the proposed section 23 should be voted down. Once laid aside, we can focus on making a supportable amendment that clarifies the existing language of our Constitution. And while this author is not in favor of any casino, if "lottery" and "gambling" were redefined and the proper statutes put in place, then it would seem eminently more fair and forthright to "let the chips fall where they may."

¹ Formal Opinion of GALE A. NORTON, Attorney General of Colorado, April 21, 1993