Could Connecticut hire a private company to operate its off-track betting system?

Plain-English summary

In September 1992, Connecticut’s AG concluded that the Division of Special Revenue and Gaming Policy Board had authority to place operation of the state off-track betting system with a private business. One statute let them establish the permitted method of operating the system; another expressly authorized contracts for the facilities, goods and services needed to operate it. The AG also noted statutory language contemplating either the Division or another person or business operating the system.

That legal authority did not settle the practical terms of a transfer. The existing operation employed about 600 full- and part-time workers, and collective bargaining agreements then ran through June 1994. The AG said employee rights, contract terms and other labor questions had to be addressed by the Division and Board. He did not decide those factual and contractual issues in this opinion.

Gaming officials at the time

The opinion recognized statutory authority to select a private operating method, with Board involvement. It did not determine which contract or labor arrangement would serve the state best.

OTB workers at the time

The AG expressly left existing bargaining agreements and employee remedies for separate consideration. His conclusion about contracting power did not dispose of those rights.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did Connecticut law allow private operation of off-track betting?
A: The AG said yes. He read the operating-method and contracting statutes as authorizing the Division and Board to choose that arrangement.

Q: Did the opinion cancel existing OTB employee contracts?
A: No. It said collective bargaining and other labor matters still had to be resolved.

Q: Did the AG decide that privatization was the best choice?
A: No. He found legal authority to make that choice, while leaving cost, labor and contract questions to the responsible agencies.

Background and statutory framework

Conn. Gen. Stat. § 12-571(b) authorized rules for the permitted operating method with Board advice and consent. Conn. Gen. Stat. § 12-572(b) authorized contracts needed for effective system operation with Board approval. The AG read those grants together but stopped short of deciding the proposed arrangement’s labor consequences.

Citations and references

Statutes: Conn. Gen. Stat. § 12-571(b); Conn. Gen. Stat. § 12-572(b).

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1992-formal-opinions/robert-werner-division-of-special-revenue-1992025-formal-opinion-attorney-general-of-connecticut

Original opinion text

Robert Werner, Division of Special Revenue, 1992-025 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

September 22, 1992

Robert Werner

Executive Director

Division of Special Revenue

555 Russell Road

Newington), CT 06111

Dear Mr. Werner:

At the direction of the Gaming Policy Board, you1 seek the opinion of this office as to "whether the division, with the advice and consent of the Board, has the authority under existing legislation to contract with a private entity to assume the operational duties of the OTB system." In our view, such a plan2 is authorized by existing Connecticut statutes. We hasten to add, however, that implementation of this concept involves the resolution of other critical considerations by the Board.

Conn. Gen. Stat.. § 12-571(b) provides:

The executive director, with the advice and .consent of the board, shall adopt rules and regulations, consistent with this chapter, establishing and governing the permitted method or methods of operation of the system of off-track betting. (Emphasis supplied.)

Clearly then, the Division and Board must establish the permitted method of operation. Since the advent of legalized off-track wagering in Connecticut in 1976, the chosen method has been to utilize Division personnel to perform security, maintenance and ticket cashing functions under a contract awarded pursuant to Conn. Gen. Stat. § 12-572(b) which provides as follows:

The executive director, with the approval of the board, is authorized to contract with any person or business organization to provide such facilities, components, goods or services as may be necessary for the effective operation of an off-track betting system....

Our office has already acknowledged that this statutory language is unique in that the Division and Board are given the authority to award or amend this contract without competitive bids, presuming a determination by said agencies that to do so would "be in the best interests of the State...." 88 Conn. Op. Atty. Gen. 298, December 28, 1988. The authority to contract for services "as may be necessary for the effective operation of an off-track betting system" clearly supplements the power previously delegated under Conn. Gen. Stat. § 12-571(b) to establish the permitted method of operation.

It is significant, we believe, that the legislature, when it decreed the manner in which pari-mutuel off-track betting winnings would be calculated and distributed, imposed the duty upon the Division "or any person or business organization operating an off-track betting system." Conn. Gen. Stat. § 12-572(c).

The use of the disjunctive "or"3 in the foregoing statutory language implies that choice or reparability was anticipated. See, Horak v. Middlesex Mutual Assurance Co., 181 Conn. 614, 617 (1980); Seisto v. Groton, 178 Conn. 520, 525 (1979). Clearly then, the Legislature expected that the Division and Board might choose a system of "privatization" as the most effective method of operation of an off-track betting system.

From the foregoing, we conclude that the Division, with the advice and consent of the Board, may determine that so-called "privatization" will provide the most economical method of operating a system of off-track betting.

The conclusion that the Division and Board are possessed of sufficient statutory authorization to proceed to "privatize" the Connecticut off-track betting system does not, however, end the inquiry. As your request correctly points out, "[p]rivatization also creates a number of issues regarding state employees who are employed in the OTB system." You inform us that there are some 600 full and part-time employees engaged in the present system and that the existing collective bargaining agreements do not expire until June 30, 1994.

Any decision regarding "privatization" necessarily implicates the rights and remedies of these employees which may be based upon the existing collective bargaining agreements as well as the provisions of state law. These and other equally important labor related questions are delineated in your request and must be addressed by the Board and Division in the discharge of their obligation to establish the "permitted method ... of operation of the system of off-track betting." Of course, the resolution of these labor related issues is also a function of determining how to best serve the interests of the State. These issues are not strictly legal in nature; they involve questions of fact and contract interpretation as well.

In summary then, the Division and Board are authorized to "privatize" the OTB system, but these other labor-related issues will also have to be resolved.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Richard M. Sheridan

Assistant Attorney General

RB/RMS/td

1 While this request for advice was forwarded under signature of your predecessor in office, you have indicated your concurrence in this request.

2 You refer to this plan as "privatization."

3 We note also that this disjunctive phrase is again employed by the Legislature in the imposition of restrictions against expansion of legalized gambling: The Division and Board "shall not operate or authorize the operation of more than eighteen off-track betting branch facilities." (Emphasis added.) Conn. Gen. Stat.. § 12-57 1 a(a).