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Legal View: Gambling Your Liquor License Away

By Jerry Farrell, Jr.

There’s no question that, over the next few years, the State of Connecticut is going to have to wrestle with its laws and policies regarding legalized gambling. The movement to create Gamblingcasinos in neighboring Massachusetts, the declining amount of revenue that the casinos at our state’s two Indian reservations bring to state coffers, and the creeping legalization of online gambling will inevitably cause Connecticut’s gaming laws to be rewritten.

Whether it is a good thing or a bad thing, it seems to me that the idea of legalizing keno in Connecticut and allowing it in locations throughout the state is the first step in moving legalized gaming away from the Indian casinos and perhaps in the direction of social venues – local restaurants and bars in the 169 towns and cities that make up the state.

One doesn’t need a crystal ball to guess that restaurants and bars will be the beneficiaries of any changes that come at the expense of the two tribal nations and their near monopoly on legalized gambling. Indeed it has always been local restaurants and bars, especially those in eastern Connecticut, that claim that the casinos have taken business away from them. I can’t say that I advocate such changes – I merely see them coming.

In the meantime, it is important for liquor licensees to understand what Connecticut law presently says about gambling on their premises.
Most liquor licensees are fairly clear that most forms of gambling are illegal and should not be happening on their watch. They know they can’t install slot machines or hire dealers and bring in blackjack tables.

Jerry Farrell Jr., Attorney

But where some licensees become confused is over the so-called “social gambling exception”. That exemption, contained in Section 53-278b of state law, exempts from prosecution and punishment people who gamble “incidental to a bona fide social relationship”, provided that no one other than the participants receives anything from the game. Exceptions to laws are always somewhat tricky.

In most instances, the social gambling exception would cover the situation where a group of friends, having dinner at a restaurant, spontaneously and independently play poker after their meal. Without prompting, without advertising by the establishment, without involvement by the establishment – it becomes seemingly legitimate and within the exception.

In contrast, the social gambling exception would not cover, according to state policy and an opinion from the Attorney General’s Office, where a licensed liquor establishment, other than the two tribal casinos, advertises “Poker Night” or some similar promotion of some method of gambling – even where the establishment receives no part of the money involved in the game.

Under the Attorney General’s opinion, the mere fact that the establishment has sponsored such a “Poker Night” and is benefiting from people coming to that event and purchasing food and drink makes the establishment legally involved in the gambling. The distinction between the two situations seems to be, that in sponsoring a Poker Night, the establishment intends to create indirect profit for itself, whereas where the friends spontaneously break out their deck of cards after dinner, the establishment itself never intended to profit.

Unlike the laws involving not selling alcohol to minors or to intoxicated persons – which one can understand the reasoning behind easily and immediately – this particular provision of state law and policy takes some time and effort to understand. But, like all laws, those simple to understand and those complex to understand, the smart licensee knows that the best policy is to know it and comply with it, and therefore not gamble with one’s future.

Jerry Farrell, Jr. served as Chairman of the Connecticut Liquor Control Commission from 2006 to 2011. Today, he is an attorney in private practice, focusing on liquor licensing law. He can be reached at jerry@ctliquorlaw.com. This column is not intended to be legal advice; consult an attorney for answers to your specific questions and situation.

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