| Date: | 12/21/2023 |
|---|---|
| Organization: | State Ethics Commission |
A state legislator may accept loyalty rewards program benefits offered by a casino without violating § 6 of the financial disclosure law, G.L. c. 268B, when membership in the loyalty card program is available to the general public and the benefits are offered to the legislator on the same terms and conditions as they are to all other program members.
A state legislator asks whether they may accept benefits from a Massachusetts casino’s loyalty rewards program of which they became a member prior to their election as a state legislator. The casino operates under a gaming license issued to ABC by the Massachusetts Gaming Commission (“Gaming Commission”).
The casino’s rewards program, which is governed by a set of terms and conditions, provides members with benefits such as free slot play, complimentary rooms, invitations to tournaments, and savings on dining, retail, and overnight stays based on use of their rewards program card when playing select reel slot or video poker machines, and table games. To earn benefits, a member must insert their card into an eligible slot or video poker machine or provide their card to a table games dealer prior to beginning their play. Benefits may be earned based on amount of play at reel slot or video poker games or based on a member’s average bet, type of game played, and length of play.
To enroll in the rewards program, a member must be 21 years of age or older, provide their full legal name, physical address, phone number, email, date of birth, and personal tax identification number, if applicable, and agree to abide by the rewards program terms and conditions, which are available on the casino’s website. To complete registration and activate membership, a member must appear in person at the casino and present a valid government issued photo identification or complete the identity verification process by opening an account with the casino’s online betting app. Any member of the general public who meets the eligibility requirements for program membership may enroll in the loyalty card program.
In sum, rewards program benefits are awarded to members based on their transaction history, in accordance with the terms and conditions, and not awarded on an ad hoc basis at the discretion of a casino employee.
Is a state legislator who is a member of a Massachusetts casino’s loyalty card rewards program prohibited by § 6 of the Financial Disclosure Law, G.L. c. 268B, from accepting benefits from the casino earned through the program?[1]
No. A state legislator is not prohibited by G.L. c. 268B, § 6 from accepting loyalty rewards program benefits offered by a casino when membership in the loyalty card program is available to the general public and the benefits are offered to the legislator on the same terms and conditions as they are to all other program members.
A state legislator may not accept a gift “of any kind or nature” from a legislative or executive agent (commonly called a “lobbyist”). Section 6 of Chapter 268B provides:
No executive or legislative agent shall knowingly and willfully offer or give to any public official or public employee or a member of such person's immediate family, and no public official or public employee or member of such person's immediate family shall knowingly and willfully solicit or accept from any executive or legislative agent, any gift of any kind or nature; provided, however, that the state ethics commission shall promulgate regulations: (i) establishing exclusions for ceremonial gifts; (ii) establishing exclusions for gifts given solely because of family or friendship; and (iii) establishing additional exclusions for other situations that do not present a genuine risk of a conflict or the appearance of a conflict of interest.
For the purposes of this section, a person who holds a license issued by the Massachusetts gaming commission, who was required to apply for that license pursuant to section 14 of chapter 23K, shall be considered a legislative agent.
For the purposes of § 6, a “public official” includes a person who holds a position for which one is nominated at a state primary or chosen at a state election, such as a state legislator. G.L. c. 268B, § 1. A “public employee” includes individuals who are required to file a Statement of Financial Interest under Chapter 268B. G.L. c. 268B, § 1. “Immediate family” includes a spouse and any dependent children residing in the household.[2] Id.
In 2011, then Governor Deval Patrick signed “An Act Establishing Expanded Gaming in the Commonwealth” into law amending § 6’s prohibition on the acceptance of any gift from a lobbyist by certain public employees or officials by adding: “For the purposes of this section, a person who holds a license issued by the Massachusetts gaming commission, who was required to apply for that license pursuant to section 14 of chapter 23K, shall be considered a legislative agent.” St. 2011, c. 194, § 50. “Person” is defined as “a business, individual, corporation, union, association, firm, partnership, committee or other organization or group of persons.” G.L. c. 268B, § 1.
We first address the issue of whether the casino, which holds a license issued by the Gaming Commission, is a legislative agent for purposes of § 6. Section 6 cites § 14 of G.L. c. 23K, which provides that certain individuals and entities who have a financial interest in a gaming establishment, or have a financial interest in the business of the gaming licensee or an applicant for a gaming license, or is a close associate of the licensee or applicant, must be “qualified for licensure” pursuant to G.L. c. 23K, §§ 12 and 16. These individuals and entities are known as “qualifiers.” See 205 CMR 116.01. However, pursuant to § 14, these “qualifiers” do not hold a gaming license (or any other license issued by the Gaming Commission) nor are they required to apply for a gaming license. Instead, ABC holds a category 1 gaming license issued by the Gaming Commission pursuant to another provision, G.L. c. 23K, § 19, to operate the casino. Thus, the statute is not entirely clear whether a casino which holds a license under § 19 is a legislative agent within the meaning of § 6.
In order to give effect to every clause and word of the statute, and adopt a construction that is consistent with the legislative intent to ensure the highest level of public confidence in the integrity of the regulation of all gaming activities in the Commonwealth, we hold that both the qualifiers under G.L. c. 23K, § 14 and a gaming establishment which holds a gaming license under Chapter 23K are legislative agents for purposes of G.L. c. 268B, § 6. See St. Laurent v. Middleborough Gas & Electric Dept., 93 Mass. App. Ct. 901, 902 (2018) ("One of the cardinal principles of statutory construction is to give effect, if possible, to every clause and word of a statute."); Boston Police Patrolmen's Ass'n v. Boston, 435 Mass. 718, 719-720 (2002) (interpreting statutory language according to intent of Legislature ascertained from its words considered in context of statute's purpose).
Accordingly, the state legislator (and their spouse or dependent children who reside in their household) may not accept any gift from the casino, such as a complimentary beverage that a casino employee may offer to a guest, even if the same gift is offered to every casino guest.
The next issue we must decide is whether a benefit offered by the casino through its rewards program is a gift for purposes of G.L. c. 268B, § 6. The statute broadly defines “gift” to include “a payment, entertainment, subscription, advance, services or anything of value, unless consideration of equal or greater value is received.” G.L. c. 268B, § 1 (emphasis added). The definition of “gift” excludes “a political contribution reported as required by law, a commercially reasonable loan made in the ordinary course of business, anything of value received by inheritance, or a gift received from a member of the reporting person's immediate family or from a relative within the third degree of consanguinity of the reporting person or of the reporting person's spouse or from the spouse of any such relative.” Id.
Under the rewards program, there is an agreement between the casino and the program member that, subject to terms and conditions, the member is eligible for associated benefits from the casino if they play a specified amount of select reel slot, video poker, or table games. Stated another way, the individual member’s eligibility is based on their transaction history and not subject to the discretion of casino employees. The member has a reasonable expectation that in exchange for their loyally playing the casino’s games, they will be eligible to receive prescribed benefits from the casino. This expectation of reward eligibility is shared by all rewards program members regardless of whether or not they hold a public position within the meaning of Chapter 268B. In essence, the program member provides consideration of equal or greater value to the casino for any rewards program benefits they receive by spending their time and money on the casino’s games using their rewards program card. EC-COI-04-4 (noting that for purposes of a contract, the requirement of consideration “is satisfied if there is either a benefit to the promisor or a detriment to the promisee.”). As a result, the benefits the state legislator may receive from the casino as a rewards program member under the terms and conditions are not gifts for purposes of G.L. c. 268B, § 6.
The state legislator may accept benefits earned and awarded through the casino’s loyalty card rewards program where membership in the loyalty card rewards program is available to the general public and the benefits are offered to the legislator on the same terms and conditions as they are to all other program members and not at the discretion of any casino employee. However, the state legislator is prohibited under G.L. c. 268B, § 6 from soliciting or accepting any gift, including but not limited to any complimentary item, service or other benefit from the casino that is offered at the discretion of a casino employee or agent or outside the terms and conditions of the loyalty card rewards program, even if that same gift, complimentary item, service or benefit is offered to members of the general public.
