The Connecticut Lottery posted a request last week for proposals from sports betting operators. This was in response to Rush Street Interactive (RSI) ending its 10-year agreement early, announcing last month it was leaving the Nutmeg State.
RSI’s PlaySugarHouse did say they will continue operations until a new partner is found. They were the only sportsbook that worked with the CT Lottery. The other two license holders – FanDuel and DraftKings – are partnered with the state’s two Native American tribes.
“We thank the CLC for their partnership over the last two years,” RSI CEO Richard Schwartz said regarding the CT exit. “We are proud of what we have accomplished together in Connecticut and have enjoyed the relationships that we have built with the players. Consistent with our long-term strategic goals, after much deliberation and discussions with the CLC, we believe it is in the best interest of RSI and our stockholders to wind down this partnership.”
The CT Lottery has set a May 19 deadline for proposals and according to CT Lottery documents, the partnership is expected to be for a term of eight years. There is also the possibility of a five-year extension.
One provision that the lottery kept in from the first request it published two years ago was the requirement of the sportsbook operator achieving revenue of at least $10 million annually.
In the period from October, 2021, when the state launched sports betting, RSI lagged woefully behind DraftKings and FanDuel. In a little under two years, RSI had amassed $14.3 million in revenue. Conversely, FanDuel collected $96.2 million and DraftKings had $85.7 million.
So if RSI failed to reach the $10 million annual mark, who could be a possible replacement? The three favorites to apply would be ones who submitted bids two years ago. Caesars, MGM Resorts and Penn Entertainment. They have the resources and the national recognition to possibly succeed in this market.
One provision that might preclude some operators is one that the two tribes negotiated into their compact. They got the lottery to ban its sportsbook partner from using a brand used by other land-based casinos.
