Connecticut Governor Ned Lamont has reached an accord with the Mashantucket Pequot and Mohegan tribes on a gaming expansion plan that includes sports betting and online gaming, the three parties announced March 18.
Lamont declared, “Connecticut is on cusp of providing a modern, technologically advanced gaming experience for our residents, which will be competitive with our neighboring states.”
According to the Associated Press they agreed that the state would tax online gaming offered by the tribes at 18 percent for the first five years and 20 percent thereafter. Sports betting would be taxed at 13.75 percent. Reportedly the sticking point in the negotiations was that the Pequots were holding out for a lower taxation rate. Currently the tribes pay 25 percent of their slot machine profits to the state.
This agreement comes at a propitious moment for the Pequot tribe. Moody’s Investors Service has attached a “limited default” notation to the debt rating of the tribe, which owns and operates the Foxwoods Resort Casino in Connecticut.
Moody’s applied the designation after the tribe was again able to postpone the due date of a major loan of $275 million that has had several extensions. Moody’s considers this to be a “missed payment,” noting that $255 million of that loan was outstanding as of September 30, 2020.
Mashantucket Pequot Tribal Chairman Rodney A. Butler called the designation “technical in nature,” and said it was removed after the lenders agreed to extend the maturity date to February 16, 2022. “No payment default has occurred,” he said.
Before Thursday’s announcement the governor previously announced a separate agreement with the Pequots sometime rival the Mohegan tribe on those issues, which caused resentment with Butler, who called it “disrespectful.”
In recent days, however, indications of an agreement including tribes were evident. His chief of staff, Paul Mounds, “Any negotiation, all parties got to come to a conclusion on it. At the end of the day, a global agreement on gaming is a win for the Connecticut taxpayer. There’s always a lot of give and take that has to do with a negotiation of this magnitude.”
