There should be a short hose attached to that nipple on the tranny that just points downward to act as a vent. Doesn't look like that hose have been in place for some time. There is also another hose that goes from a nipple on the air filter housing to a connector on the side of the engine. And then from that connector to a nipple on top of the fuel tank that captures the gas vapors and pulls then into the engine to be burnt.