ARONSON, JUDGE TRIAL REFEREE.
This action is an administrative appeal brought by the plaintiff, Autotote Enterprises, Inc. (Autotote), from the declaratory ruling of the division of special revenue (Division), and approved by the gaming policy board (Board), that the statutory moratorium on the expansion of off-track betting facilities precluded the plaintiff from broadcasting live racing on cable television while, at the same time, advertising the availability of telephone betting on those races.
The basis for the Division's ruling was the rationale that the promotion of Autotote's telephone betting service, in connection with the broadcasting of live racing events, would create an off-track betting simulcast facility in every subscribing household. General Statutes § 12-571a, with certain exceptions not pertinent here, provides: "(a) The Division of Special Revenue and the Gaming Policy Board shall not operate or authorize the operation of more than eighteen off-track betting branch facilities . . ." Section 12-571a(b) further provides that, of the eighteen off-track betting facilities, eight may have "screens for the simulcasting of off-track betting race programs . . ."
As both parties recognize, the standard of review of the agency's decision, in its declaratory ruling, involves an interpretation of § 12-571a. Where the agency's interpretation of a statute has not previously been subject to judicial review, as here, no special deference can be given to the agency's statutory interpretation. Lieberman v. State Board of Labor Relations, 216 Conn. 253, 263, 579 A.2d 505 (1990). Since the agency's conclusions of law are not entitled to special deference, our review of the interpretation to be given to § 12-571a is, therefore, plenary. Poole v. Waterbury, 266 Conn. 68, 82, 831 A.2d 211 (2003).
Autotote owns and operates a system of off-track betting in Connecticut, subject to the regulatory authority of the Division. On May 21, 2003, Autotote petitioned the Division for a declaratory ruling as to CT Page 10314 whether the moratorium on off-track betting facilities imposed by § 12-571 a applies to its proposed contracts with cable operators for the live broadcast of racing events, where those broadcasts would contain advertisements for the sale of off-track betting accounts by Autotote.
On September 22, 2003, the Division issued a declaratory ruling, approved by the Board on October 9, 2003, concluding that while Autotote could legally televise races and accept wagers by telephone, any advertisement of its telephone betting system during live broadcasts of racing events would violate § 12-571a by creating off-track betting facilities in excess of the moratorium imposed by that statute.
Of crucial importance here is whether simultaneously televising live races and advertising telephone betting is the creation of an off-track betting facility within the meaning of § 12-571a. If it is, then the creation of an additional facility violates the moratorium contained in § 12-571a, which limits the number of off-track betting simulcast facilities located within the state of Connecticut to eight.
To resolve the issue presented in this appeal, we must construe the meaning of the term "off-track betting branch facilities" contained in § 12-571a(a).
"[T]he process of statutory interpretation involves a reasoned search for the intention of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. In seeking to determine that meaning, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) Fleet National Bank's Appeal from Probate, 267 Conn. 229, 237-38, 835 A.2d 785 (2004), citing Commissioner of Social Services v. Smith, 265 Conn. 723, 734, 830 A.2d 228 (2003).
Before we start with our analysis in this appeal, it is important to look at the organizational structure enacted by the legislature in creating a system permitting legalized gambling in the state of Connecticut. There are two organizations created for this purpose: a division of special revenue established pursuant to General Statutes § 12-557c and a gaming policy board established pursuant to General Statutes § 12-557d. "The Division of Special Revenue shall, in cooperation with the Gaming Policy Board, implement and administer the provisions of this chapter [226, Division of Special Revenue and Gaming CT Page 10315 Policy Board] and chapter 226b [Disclosure Statements with Regard to Pari-Mutuel Betting] under the supervision of an executive director." General Statutes § 12-557c(a).
The executive director, pursuant to General Statutes § 12-567, is required to establish organizational units by division. The organizational units are to be responsible for "administration, licensing and integrity assurance, planning and research, gambling regulation, and state off-track betting and state lottery regulation. Each unit shall be under the direction of a unit head who shall administer and coordinate the operation of his respective unit." General Statutes § 12-567.
We note tat the Board, pursuant to § 12-557e, is granted certain powers and duties by the legislature "in cooperation with the Division of Special Revenue to implement and administer the provisions of this chapter [226] and chapter 226b." Some of these powers are "(2) approving contracts for facilities, goods, components or services necessary to carry out the provisions of [General Statutes] section 12-572 . . . (5) approving the types of pari-mutuel betting to be permitted; [and] (6) advising the executive director concerning the conduct of off-track betting facilities . . ." General Statutes § 12-557e.
In the embryonic stage of developing a wagering system, Connecticut in 1973 entered into a contract with American Totalisator Systems, Inc., and AmTote, both subsidiaries of General Instrument Corporation, to establish and operate teletrack and off-track betting systems. American Totalisator Co. v. Dubno, 210 Conn. 413, 415, 418, 555 A.2d 421 (1989). In 1993, Autotote acquired the off-track betting system from the state of Connecticut for $20 million. (Plaintiff's Brief, dated January 12, 2004, p. 2.)
The defendant recites in its brief that "Autotote is in the off-track betting business, taking wagers on races from over seventy locations throughout the country . . . It owns [twelve] [off-track betting] parlors in Connecticut, including [six] simulcast facilities . . . At simulcast facilities, the races can be viewed on television screens via a satellite and fiber optic cable network from the New Haven simulcast facility, which is the hub . . . The present network grew from one simulcast facility in New Haven in 1979 to the six now owned by Autotote. Plainfield Greyhound Park and Shoreline Star Greyhound Park in Bridgeport also have simulcast [off-track betting] facilities, making a total of eight in Connecticut." (Defendant's Brief, dated February 4, 2004, p. 3-4.)
The defendant refers to the opinion of Attorney General Richard CT Page 10316 Blumenthal noting that "the statutes governing off-track betting allow only eight simulcast facilities and that the Autotote proposal would effectively install a simulcast facility in every subscribing household in Connecticut . . . He agreed that if offered separately, there is no legal bar to broadcasting races or promoting telephone betting. The broadcasting of races is legal and the truthful advertising of telephone betting is legitimate, too. However, he found the linking of the two to be unauthorized by statute and not constitutionally protected. He said the proposal would explode the present limitation on simulcast facilities and violate the wording and intent of the statutes." (Defendant's Brief, dated February 4, 2004, p. 5.)
We start with the well known tenet of statutory construction that it is presumed that no word or phrase in a statute is superfluous. Fleet National Bank's Appeal from Probate, supra, 267 Conn. 250. With this tenet in mind, we look at the key words in § 12-571a(a): "off-track betting" and "branch facilities."
The American Heritage College Dictionary (3d Ed. 1993) defines "off-track betting" as "a system of placing bets away from a racetrack." While § 12-571 authorizes the executive director of the Division to enter into an agreement for the sale of an off-track betting system, § 12-571a defines the parameters of such system by limiting the number of off-track betting branch facilities to eighteen. Subsection 12-571a(b) further breaks down the legislative plan for off-track betting by restricting the eighteen off-track facilities to eight simulcast facilities, four of which are to be located in the city of New Haven, Windsor Locks, Plainfield and Bridgeport. The location of each such facility must be approved by the executive director with the consent of the Board and approved by the legislative body of the town in which the facility will be located. General Statutes § 12-571a(b).
In seeking to determine the legislative meaning of an "off-track betting branch facility," we look to other statutory provisions that further the state's gaming policy. One such statutory provision is General Statutes § 12-572(a) that recites: "The executive director, with the advice and consent of the board, may establish or authorize the establishment of such off-track betting facilities throughout the state for the purpose of receiving moneys wagered on the results of races or jai alai games as he shall deem will serve the convenience of the public and provide maximum economy and efficiency of operation, provided the establishment of such a facility in any municipality for the purpose of receiving moneys on the results of races or jai alai games shall be subject to the approval of the legislative body of such municipality which shall be given only after a public hearing on the same." CT Page 10317
In furtherance of the goal established in § 12-572(a), § 12-572(b) provides that "[t]he 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."
The language of § 12-572 strongly indicates that the primary purpose of establishing off-track betting facilities is to create physical locations in the state that can be licensed and monitored where the public can go to place wagers on the results of races. With regard to the operation of an off-track betting facility, § 12-572 is replete with references to a system that would maximize the economy and efficiency of such facilities, as well as regulate and control the wagers made on races at those facilities. General Statutes § 12-574(c) requires that any concessionaire at an off-track betting facility be licensed by the executive director. In addition, an employee of a concessionaire or vendor is required under General Statutes § 12-574(g) to obtain an occupational license from the executive director. Section 12-574(j) requires the executive director, with the advice and consent of the board, to adopt regulations governing the operation of the off-track betting system and facilities. Section 12-574(k) gives the executive director power to require that the licensee of an off-track betting facility maintain financial statements, books and records of the operation. Section 12-574(k) goes so far as to authorize the executive director to "place expert accountants and such other persons as he may deem necessary, in the . . . off-track betting facilities . . . for the purpose of satisfying himself that the division's regulations are strictly complied with." A review of these provisions makes it clear that classifying a person's house as an off-track betting facility because it receives racing broadcasts with advertisements for over-the-phone wagering does not fit within the structure enacted by the legislature.
We note that from a policy standpoint, there has been an "ancient and deep-rooted public policy" against gambling that has been eroded over the years by the establishment of the division of special revenue to oversee various forms of lottery, off-track betting and frontons for jai alai and pelota. (Internal quotation marks omitted.) Hilton International Co. v. Arace, 35 Conn. Sup. 522, 527-28, 394 A.2d 739 (1977). Second, we note the legislative purpose, as evidenced by § 12-557 et seq., to tread lightly when introducing new forms of gambling in this state in recognition of the anti-gambling policies of the past. For this reason, once certain forms of gambling were permitted by the legislature, they were allowed only under the strictest of conditions. Examples of such conditions are the creation of a division of special revenue with a CT Page 10318 strong executive director, the creation of a gaming policy board, and stringent statutory limitations such as § 12-571a providing a moratorium on off-track betting facilities.
Our function here is not to pass upon the morality of having live racing broadcasts in one's household, where those broadcasts contain advertisements for the placing of bets through Autotote, but rather to determine whether such an arrangement would cause a subscribing household to be considered a "facility" within the meaning of § 12-571a. We conclude that it does not. As we have noted, a facility must be an established location with a license from the executive director. To conclude otherwise, it would mean that every household with live racing broadcasts, together with the advertising of a telephone betting service, would have to be considered the location of a facility. Every such household would have to be licensed by the executive director, as well as receive the approval of the municipality where it is located after a public hearing on the issue. In addition, the use of a household for wagering purposes implicates planning and zoning issues. As Representative Hannon stated in House debates concerning § 12-572: "It was the thrust of this amendment [schedule F] to impose in addition to any planning and zoning restrictions adopted or present in any town, to impose this further restriction . . . that the local legislative body would have to vote yes after a public hearing." 14 H.R. Proc., Pt 12, 1971 Sess., p. 5264. Carried to the extreme, if a household could be considered a facility, the executive director could place an expert accountant or other persons there to monitor that the household is strictly complying with the division's regulations. Furthermore, if a person's home is construed as a "facility," it may be subject to public use. We cannot imagine that the legislature would intend such bizarre consequences in defining the term "facility" in the gaming statutes. "Statutes must be construed, if possible, so that bizarre, difficult or impractical results do not occur." AvalonBay Communities, Inc. v. Inland Wetlands Commission, 266 Conn. 150, 165, 832 A.2d 1 (2003).
We conclude therefore that the combination of the live broadcasting of races via cable television together with the advertising of wagering is not a "facility." Such activity does not violate the moratorium on facilities as provided in § 12-571a. Accordingly, judgment may enter in favor of the plaintiff sustaining its appeal without costs to either party.
Arnold W. Aronson Judge Trial Referee
CT Page 10319
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