Connecticut’s two gaming tribes, the Pequots and Mohegans disagree with Attorney General George Jepsen that if sports betting becomes legal it won’t be the exclusive property of the tribes to exploit.
Because the tribes feel so strongly about it, they have threatened to withhold their 25 percent revenue slots sharing that they pay the state in return for exclusivity of casino gaming.
Last week as legislator saw their objection and raised them by proposing an amendment to a proposed bill legalizing the practice to specifically exclude sports betting from what the state considers gambling. That would get around the provision in the compact by redefining what gambling is.
The Mohegans operate the Mohegan Sun and the Mashantucket Pequots operate Foxwoods Resort Casino.
Of course, until the U.S. Supreme Court rules on the legality of a 1992 federal ban on sports betting it remains illegal in all but four states. Until then Professional and Amateur Sports Protection Act (PASPA) remains the law of the land.
The Supremes are reviewing the case of Murphy v NCAA and are expected to issue a ruling before the summer recess.
House Speaker Jo Aresimowitz told the Connecticut Post that he considered the tribal threat to be basically a negotiating tactic. “The tribes have been great partners and I’m sure we will have conversations,” he said.
Despite the tribal protestations, sports betting is not defined as a Class III game under federal law, although it is treated as such in Nevada. Since it is not authorized in any tribal state gaming compact, the argument could be made—and probably will be made—that it is not allowed under any compact.
In Jepsen’s opinion he writes, “Moreover, it is our opinion that if sports betting were to become lawful in Connecticut, the Tribes would not have an exclusive right under the existing Compacts and MOUs to offer it … Sports betting is not listed as an authorized game. By contrast, for example, pari-mutuel betting on horse and dog racing and jai alai games are authorized games. Id. The exclusion of sports betting from the specific list of authorized games is compelling evidence that the Compacts do not presently authorize it …”
Jepsen opines that amendments to the existing compacts are necessary to authorize tribal sports betting.
The tribes, in fighting Jepsen’s view, are hoping to introduce sports betting kiosks at their two casinos. Their argument is that they have a monopoly on “video facsimile” gaming, which they choose to define as including betting kiosks.
Mohegan Attorney General Helga Woods told the Post “If the state authorizes video facsimile gaming, the exclusivity provisions of the compacts would be violated and our obligations to make the slot contributions cease.” Together the two tribal casinos paid about $260 million last year.
Jepsen’s opinion leaves open the slightest possibility that the tribes may be right when he writes, “Although it is our view that sports wagering is not a video facsimile, whether it is a ‘commercial casino game’ is an open question.”
Woods reacted: “While Attorney General Jepsen calls it an ‘open question,’ we believe that sports betting is a ‘commercial casino game’ as that term is used in the (agreement’s) exclusivity provisions.”
While reacting mildly to the tribes’ threats the speaker noted that the state could revoke authorization for slot machines on the reservation but added “No one wants to do that. The tribes would be part of anything we do, we know that.”
House Majority Leader Matt Ritter said he agreed with Aresimowitz about the tribes’ position. “Their argument is a little less credible because when the compact (gaming agreements) was signed, there was no sports gaming in Connecticut. It was never contemplated, the specific words were never used, and here we are 26 years later and they’re raising it for the first time,” he said. “I’ve heard better legal arguments than that one.”
Woods said the tribes would be open to an agreement similar to the one that was reached in 2015 over keno. The compacts were amended so that the games were available statewide as part of the Lottery and on the reservation.
Lori Potter, a spokesman for Pequots said, “We are confident that gaming opportunities such as sports betting can be achieved within the framework of our existing agreements without jeopardizing the continuance of our payments.”
While these discussions continued in the media the legislature’s Judiciary Committee voted 28-5 to move HB 5307, a bill that would direct the state’s consumer protection department to adopt regulations for sports betting. This sends the bill back to the House. The Public Safety and Security Committee had previously approved the bill.
A similar bill is undergoing scrutiny in the Senate: SB 540. It has been approved by the Finance, Bonding and Revenue Committee but so far, no calendar date has been set for a vote.
A legislative analyst projects that, if the state Lottery is put in charge of sports betting revenues would increase as much as $2 million the first year and rise to $4 million by 2020 and as high as $16 million eventually.
In neighboring Rhode Island that state government is already planning on bringing in $23.5 million the first year.
SB 540 includes a “sports betting right and integrity” of 25 percent that sports leagues have asked for, although the House bill does not.
