In what could be a significant expansion of the sports betting industry in the U.S., lawmakers and tribes in both Connecticut and Florida have approved legalization of the wagers.
Connecticut’s two gaming tribes, the Mohegans and the Mashantucket Pequots, will offer both retail and mobile bets under their new deal. Florida’s plan would give control of retail and mobile sports betting to the Seminole Tribe, and also allow the tribe to build three new casinos and add Las Vegas-style table games like craps and roulette. The tribe also would control sports betting at existing horseracing tracks and former dog racing facilities via its new Hard Rock Digital platform.
The Florida deal may face more pushback due to debates about Amendment 3, which requires voter approval of any gaming expansion, and bets placed beyond reservation boundaries.
Lamont Wasted No Time Signing Bill Into Law
In Connecticut, the Senate passed its sports betting bill just before midnight on May 25 by a vote of 28 to 6. The House had approved the measure a week earlier, by a 121-21 vote.
Lamont said the bipartisan legislation “will bring Connecticut’s gaming, lottery and sports betting market into the future, positioning our state as a leader” and signed the measure in short order, on May 27.
The bill amends the existing compacts between the state and the tribes to enable sports betting, iGaming and online fantasy sports, with the state collecting a share of the revenue.
The compacts still need to be approved by the Interior Department’s Bureau of Indian Affairs (BIA). If done expeditiously, bettors in the state could start betting on sports by the beginning of the NFL season. Most of Connecticut’s neighboring states—and indeed more than half of the United States— have a head start in sports betting. The BIA has 45 days to give that approval once it gets the compacts.
Besides the gaming tribes, the Connecticut Lottery will also be able to offer online sportsbooks and license 15 retail locations, with both Hartford and Bridgeport specifically mentioned as hosts.
The state will collect 18 percent of the gross revenues for internet gaming for the first five years and 20 percent for the next five years, with an option to extend the rates. Sports betting and fantasy sports contests will be taxed at 13.75 percent. The state estimates it will collect $30 million a year the first year and eventually reap $83 million annually.
One ambivalent voter for the bill, Senator Mae Flexer is concerned about problem gambling, but finally supported it because she wants to help the tribes, who were hit hard by the pandemic. “They’re key, important economic partners,” she said. “Their employees are my constituents, who I’m charged to represent.”
Some senators—especially those whose districts were near or include East Windsor—criticized the bill for excluding the East Windsor satellite casino that the tribe fought for years to build. However, the governor insisted on dropping that casino to prevent MGM from suing to protect its MGM Springfield casino, 14 miles over the border in Massachusetts. The bill doesn’t allow an off-reservation tribal casino for at least a decade.
Rep. Tom Delnicki, who represents East Windsor, voted against the bill, declaring, “This is built on a broken deal.”
Meanwhile, the Fantasy Sports & Gaming Association is displeased that the bill will shut down their operations until the state sets up a licensing system and they are approved. It could keep them out of the game for months, they contend. In a statement the association said, “Legislation currently under consideration by the Connecticut General Assembly could result in the shutdown of paid fantasy sports in Connecticut for a significant period of time, possibly through the NFL season.”
An estimated 600,000 state residents participate in such games with FanDuel and DraftKings as the largest companies involved. Currently those companies operate in a gray area that one lawmaker called “murky” but which will change July 1 when the law goes into effect.
Peter Schoenke, owner of RotoWire.com and an association board member, said, “I think there was probably a mindset that this industry is just FanDuel and DraftKings. It’s so much bigger than that.” Schoenke said he thinks it will take six months to two years for a company to get a license, based on what other states have done.
Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, hailed the passage of the bill, saying, “As we have said, gaming is more than a business for the Mashantucket Pequot Tribal Nation. It is the way we support our government, educate our children, underwrite youth programs and take care of our elders. Tonight’s vote will be another milestone in what has been a long journey.”
Butler said he thinks sportsbooks can be ready to roll by NFL season. “It’s definitely doable,” he said. “I think the biggest hurdle will be on ourselves and getting the regulatory process in time. There is no reason to reinvent the wheel. We have incredible professionals within the state and we should have state regulations in place.”
Florida’s Rockier Road
Florida became the largest state by population to legalize sports betting when the House of Representatives officially ratified a new gaming compact with the Seminoles in late April.
Under the compact’s terms, the state will receive at least $2.5 billion over the next five years and an estimated $20 billion over the course of the 30-year deal. The numbers are enticing, but there’s a long road ahead.
Under the newly-approved compact, any and all sports bets—even if made on mobile devices or via parimutuel partners—must “go through servers” placed on tribal lands. That has many concerned the new compact is almost too sweet of a deal for the Seminoles, who already have a huge reach and advantage in Florida gaming.
The largest debate is the interpretation of where those bets would originate. Many argue that if bets placed online technically run through servers physically on Seminole land, they are therefore reservation-based. Opponents say that’s untrue, and also argue that “mobile/online betting constitutes an expansion of gaming and is a flagrant violation of Amendment 3, which requires voter approval for any gaming expansion. Amendment 3 was overwhelmingly passed by voter referendum in November 2018.”
State Rep. Guillermo Smith was unconvinced. “We’re told … it’s not an expansion of gambling because of course, sports betting on our phone app is happening through servers on tribal land. LOL.”
State Rep. Randy Fine, who chaired the House Select Committee on Gaming and a former casino executive, noted, “Whether this is a legal expansion that violates Amendment 3, that’s for a judge to decide. Me personally, I don’t think it’s going to survive.”
Even so, Fine urged lawmakers to support the compact, simply because of the breathtaking revenue potential. “I have this deal,” he said, “and a closer path to a million and half dollars a day.”
Meanwhile, Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International, testified before legislative committees that the tribe contributed $22 million to the campaign to pass Amendment 3, expecting it would not later pose a barrier to expansion of sports betting.
Additionally, the compact allows Seminoles to offer additional table games, and the state to transfer licenses among facilities, and relocate existing parimutuels to larger locations. According to the Palm Beach Post, those provisions “could turn small-scale parimutuel gambling houses into sprawling casinos,” making venues like the Palm Beach Kennel Club “more valuable and ripe for the picking by large resorts” such as Trump National Doral.
If the latter became a casino, former president Donald Trump would be on familiar territory, as he once owned casinos, primarily in Atlantic City, where his name was emblazoned on three giant gaming halls.
“Many people consider Trump Doral to be unmatched from a gaming perspective,” Trump’s son Eric Trump told the Washington Post in March. “At 700 acres, properties just don’t exist of that size and quality in South Florida, let alone in the heart of Miami.”
To keep a casino out of the city, the Doral City Council swiftly passed an emergency ordinance to ban gambling without inviting voters to weigh in.
Armando Codina, executive chairman of commercial developer Codina Partners, agrees with critics that the compact violates Amendment 3, which was approved by more than 70 percent of voters.
“So the legislature of Florida was going to preempt the will of the people locally, saying, ‘We know better than you, and we are superseding the voters,’” he told the Post. “That’s what it said, and it’s written very plainly. None of these politicians even got elected with 71 percent of the vote.”
Codina called gaming “the most selfish industry in the world.
“No businesses thrive in the shadow of casinos,” he said. “You have private equity and financial institutions that want to come here. They are not saying we need to turn Miami-Dade County into a big casino venue.”
“The legislature is not the final say on this matter,” vowed John Sowinski, president of No Casinos, a group that helped to pass Amendment 3. “This compact is more of a buffet for gambling interests than sound policy for the state.”
As discussions continue and additional details emerge, the Seminole Tribe is reported as being “receptive to navigating the process” and becoming a “hub” for sports betting.
Attesting to the long journey ahead, Allen said that he and Hard Rock attorney Joe Webster “have our work cut out for us.”
