In Connecticut, all signs point to the imminent legalization of sports betting.
On January 6 in his annual State of the State address, Governor Ned Lamont called for legal bets, saying, “Sports betting, internet gaming and legalized marijuana are happening all around us. Let’s not surrender these opportunities to out-of-state markets or even worse, underground markets.”
In an interview with GGB News, incoming House Speaker Matt Ritter said, “I hope we’re getting close to a deal. I suspect one will happen. But ultimately it’s a little more complicated than a normal bill, because Connecticut’s two gaming tribes, the Mohegans and Mashantucket Pequots, “have got to get a deal with the governor. It’s one thing to sign a bill, and another to sign a compact amendment, and that’s where his role comes in.”
The Mohegans and Mashantuckets respectively own and operate Mohegan Sun in Uncasville and Foxwoods in Ledyard. It’s widely assumed that if they’re given a monopoly on sports betting, it will invite a lawsuit by MGM Resorts International, which currently operates MGM Springfield across the border in Massachusetts and also planned to build a casino in Bridgeport, the largest city in Connecticut. MGM also spent years in federal court and the court of public opinion in a house-by-house rear-guard action against the tribes’ satellite casino, which they wanted to build in East Windsor (that project was recently postponed, likely indefinitely). The state might also be sued by OTB interests such as Sportech.
“If we give tribes exclusivity on the reservation, that’s not an issue,” Ritter continued. “It’s the question of what happens if you go off the reservation,” as with mobile sportsbooks. “There’s probably no bill you can pass that doesn’t have some risk, but how much risk is the state willing to take from a litigation lawsuit? Some people have different appetites.”
This time around, MGM isn’t the factor that it was in former years, Ritter pointed out. “MGM is in a different stance than they were. They have no registered lobbyists. But I don’t see a scenario without a lawsuit” from other gaming interests, he added. “I err on the side of the tribes, because we get a lot of revenue from them. What I don’t want is to rip up the compacts.”
Asked about Senator Cathy Osten’s bill, which would give the tribes exclusivity on sports betting, Ritter said, “Osten’s bill goes into iGaming, which is a whole different conversation. I would vote for iGaming, but that’s a lot more than just sports betting. Playing poker on your phone is different than betting on the Giants. If I were the tribes, I would realize that iGaming is probably the more lucrative of the two. I think if you opened it up to the other operators, it wouldn’t be that much money.”
Osten Bill Upholds Tribal Exclusivity
In an interview with GGB News, Osten said her bill “is similar to last year’s, but doesn’t include the Bridgeport and East Windsor casinos, because all new ventures are on hold while we go through the pandemic.”
Osten said she’s optimistic that the time is right for her bill. “I believe the atmosphere is good to get it passed,” she said. “I believe we would have passed it last year if we had stayed in session. I’m getting the municipalities on our side.”
Economics is the main driver of this alliance, she said. “We lost about 12,000 jobs here related to the two casinos or their vendors. Hospitality and tourism across the board are having difficulties right now based on consumer confidence. People aren’t as willing to take chances in venues that have a lot of people. I’m confident it will pass.”
Her bill “includes sports betting, in person, retail or online, phones etc. and tribal exclusivity,” she said. “Court cases I’ve seen around the country indicate that sports betting is considered a Class III game, which is part of the (tribal) compact already. The bill also includes iGaming, iKeno, and iLottery. iKeno would follow the rules that Keno follows where there’s an agreement between the tribes, and iLottery would be run by the lottery corporation or its vendor. The money raised would fund debt-free college.”
In the past, Governor Lamont has said he was seeking a “global” bill that would cover all aspects of gaming. Osten said she’s talked to Lamont’s people about this. “I believe that it more than covers anything he would put in it. He has said he is favor of sports betting and iGaming, both retail and online.” She said she doesn’t believe rival bills will emerge. “House leadership is new, and the senate leadership supports my bill. I sent it to the leaders of the Senate and House—both Democratic and Republican. I figured out a long time ago that you might as well share with people.”
She considers the bill bipartisan. “I have had the second-in-command of the Republicans sign on for the bill, and the ranking member on appropriations from the House. I have equal numbers of House Democrats and Republicans. I look forward to having Connecticut join 20 other states that have done this, and it’s clear the state can use the revenues.”
‘Litigation Benefits No One’
Ted Taylor, president of Sportech, which operates OTB sites throughout the state told GGB News he’s “optimistic” about sports betting legislation. “We believe that the desire to find a solution is there for lawmakers as well as for Governor Lamont’s administration. Sports betting has grown significantly to be part of the fan experience, and the public is certainly supportive of a competitive sports betting choice. So we believe 2021 could see that goal achieved.”
The move would be “quite important” for his business, said Taylor. “With Sportech’s North American headquarters in Connecticut, we’ve invested heavily in our businesses here, and it’s critical that we remain competitive as the gaming landscape changes, both in the state and the region. It’s also an important component to our strategy in the aftermath of the Covid-19 pandemic and its impact on our Connecticut employees and operations.
“The state has attempted to establish cohesive sports betting legislation but hasn’t been able to do so, as some parties insist on complete control,” he continued. “That’s too bad, because a cohesive strategy would protect the state’s four existing gaming operators from the growing regional competition, protect consumers from illegal operators, offer consumers choice in gaming entertainment and generate new state revenues to offset declines across both the commercial and tribal segments. Differences of opinion about whether or not all new gaming in the state should be controlled by a duopoly has led to an impasse that is bad for everyone involved.”
The core difference of opinion, said Taylor, “stems from the casino operators claiming they have exclusivity over all gaming in the state. These claims have no basis in fact, and the rhetoric associated with those claims, of breaching tribal agreements, presents more significant risk to casino revenue than to state proceeds in our opinion.
“Litigation benefits no one except the lawyers. I know we don’t want that, and I’m fairly sure the sate feels the same way. A common-sense solution for pursuing new opportunities, especially for a service already being delivered in neighboring states, requires a reasonable approach from all parties.”
Why should OTB companies be included in a sportsbook bill? “Betting is what we do at Sportech,” said Taylor. “Our Connecticut businesses have been accepting bets on the sports of racing and jai alai since 1993, and we’re currently the only licensed operator legally allowed to accept bets online across the state of Connecticut.”
He added, “Sports betting aligns very closely with betting on racing and jai alai, far more so than with casino or lottery operators. Betting is a contest of skill rather than of chance; it depends on the outcome of events that take place outside the betting venue. And in most other states that allow it, sports betting isn’t restricted to casino properties in the way that traditional casino games may be.”
Taylor might even argue that OTB is a better choice for sports betting than casinos.
“I would go as far as to say that of all the current options for gaming in Connecticut, our shops and digital channels are the most appropriate for sports betting,” he said. “However, our position remains that this opportunity should be extended to the other gaming operators across the state, including both casinos and the lottery. Each one is a professional operator who would bring choice and competition to the Connecticut consumer. Such an arrangement has worked well in other states. For example, New Jersey has been successful under a model that equally treats racetracks—which conduct the same betting as Sportech’s OTBs—and casinos.”
Turner says the tribes are the “roadblock” to such a deal.
“We’ve seen no evidence to the contrary,” he said. “The statement that an omnibus gaming bill would break the tribal agreements has been noted publicly by Chairman (Rodney) Butler of the Mashantucket Pequot Tribal Nation, who then notes the combined payments made to the state by them and Mohegan Gaming and Entertainment under the arrangement as being at risk. The figures of $200 million a year, or almost $8 billion since inception, are raised. These are large sums, clearly. However, the deal is 25 percent of slot revenue to the state, so if the tribes are paying $200 million to the state, it’s evident their own margin is $600 million a year, or an incredible $24 billion since they started.”
Turner concluded, “These specific agreements between the casinos and the state have been successful, and to risk those kinds of profits and additionally risk having new competing commercial casinos in the state because you want to be the only operator for sports betting seems a high-risk gamble. The alternative is an expansion into the iGaming that’s most important to them, and remaining one of only four operators providing sports betting.
“I know what I would rather bet on.”