Connecticut Governor Ned Lamont and the Mohegan Tribe, owners of Mohegan Sun, have made a separate deal on sports betting that excludes the Mashantucket Pequots, owners of Foxwoods Resorts Casino. The Pequots now are fuming that they’ve been disrespected.
Under the terms of the deal jointly announced March 2 by Lamont and Mohegan Tribal Chairman James Gessner Jr., Indian casinos and the Connecticut Lottery would be able to offer sportsbooks and mobile sports betting. The Pequots were not mentioned in the announcement.
Lamont stated: “This agreement represents months of hard work and dedication to getting a deal that’s best for the residents of Connecticut and moves our state forward when it comes to the future of gaming.”
His office added that the agreement would “would generate tens of millions of dollars in new revenue for the state, while keeping Connecticut competitive with gaming changes currently being offered or considered in neighboring states.”
Gessner said, “This path will allow Connecticut to generate tax revenues from sports and online gaming that are competitive with other states and help keep Connecticut with those states when it comes to growing our economy and benefiting the state budget.” The chairman added, “We’re thankful to Governor Lamont and his team, and we look forward to continued work with the General Assembly as this process continues.”
Any agreement between the tribes and the state would need to be approved in the legislature, whose current session ends June 9.
Untouched would be the agreement whereby the tribes pay 25 percent of their slots revenue to the state in revenue sharing.
Reportedly the Pequots balked at the 20 percent tax on online gaming. They want an 18 percent rate. Under the announced deal, there would be a 13.75 percent tax on sports bets placed at the two casinos, online or in person.
According to the tribe, the difference in percentage rates amounts to up to $1 million per year and is considered a crucial point.
Pequot Chairman Rodney Butler lashed out at the separate agreement: “After months of closed-door negotiations, it’s offensive that Governor Lamont would announce an agreement with only one of the two Tribal Nations that have been a party to the negotiations, despite full knowledge that both sovereign Nations are needed to implement any agreement.”
He added, “We have participated in these discussions in good faith and consider today’s events extremely disrespectful in terms of process and substance. ”
Butler was seemingly caught off-guard by the joint announcement, because he had told reporters previously: “When there is an announcement, I think you’ll be pleased with the ability of the governor’s staff to negotiate — probably shocked in some areas,” Butler said. “What do I say about a good deal — nobody leaves happy, right? And so it’s been painful. But again, it’s the right thing to do for this market to finally move this across the finish line.”
A spokesman for the governor commented, “Sports wagering is allowed at the casinos and online through the casinos under this agreement. We’re hopeful the Mashantucket Pequot Tribe joins this agreement.”
House Speaker Matt Ritter expressed hopes for a quick deal so the state can start collecting taxes on sports betting. “These parties are so close that it is frustrating that we’re not there yet,” he said.
Under the terms of the Lamont- Gessner agreement: the CT Lottery would be able to run 15 retail sports betting locations, and an online sportsbook. It could offer sub-licenses for some locations to Sportech. Licenses would be for ten years, with five-year extensions.
It also calls for retail sports betting in the state’s two largest cities, Hartford and Bridgeport. Since Hartford is 27 miles from Springfield, Massachusetts, home of the MGM Springfield casino, it could be seen as direct threat to that casino, and might bring about a lawsuit from MGM. That company has done its best to stick a wrench in the efforts of Connecticut to expand gaming by fighting the tribes’ efforts to build a satellite casino in East Windsor.
Sportech, which is the state’s licensed off-track betting vendor and operates 14 OTB locations, two Bobby V’s Restaurant & Sports Bar venues and online, mobile and phone wagering, has threatened litigation upon being left out. It declared, “One year ago, Governor Lamont stated he would seek a fair resolution regarding gaming expansion involving existing gaming operators that ‘must be designed to avoid and withstand endless legal challenges.’ Regretfully, the Governor’s announcement this afternoon, that principally excludes Sportech from expanded gaming, leaves us with little option but to pursue legal recourse on behalf of our 400 Connecticut employees.”
Of tribal casino payments and the CT Lottery, the Lottery is more profitable. In 2019 the Lottery paid $370 million to the state, compared $255 million for the gaming tribes. The Lottery started to pass the casinos in 2013, when it generated $312 million. More than half of its revenue comes from the sale of instant scratchers.
The 49-year-old CT Lottery (Connecticut Lottery Corp.) has made it through several years of scandals and false steps that have led many to question its competence. This included the resignation of former president and CEO Anne Noble, in 2016, after the discovery of fraud by retailers. The next year, under an interim CEO, an error in a drawing required doing it over again, which led to more resignations.
At a recent appearance before law makers, new CEO Greg Smith made a pitch for the Lottery to enable sales through apps and computers.
He has the support of the governor’s administration, which recruited a former NBC Sports and ESPN executive, Rob Simmelkjaer a year ago as board chairman to help the lottery revamp its image in anticipation of its possible participation in sports betting. His previous experience had included researching the relationship between wagering and sports.
Lamont’s Chief of Staff, Paul Mounds, recently told lawmakers, “We knew that there’s definitely going to be discussions, as it deals with an expanded role of the lottery, and we wanted to identify someone who brings instant credibility.”
Mounds made that statement before Lamont’s deal with the Mohegans was announced, which made his other comment, also made before that announcement, even more telling: “We knew that we wanted as an administration to pursue sports gaming. And we needed more people with expertise, to be able to provide insight and guidance of the industry to the administration. As it deals with the lottery, I’m not at the position to speak about any particular role.”
After an informational appearance by Smith and Simmelkjaer before lawmakers, Rep. Maria Horn, co-chairwoman of the public safety committee, commented “I had a lot of conversations following the informational forum that we conducted, in which legislators told me, ‘Well, they seem on top of their game.’ This seems like a different kind of operation.”
Simmelkjaer praises Smith, who was hired in 2018 to right the Lottery’s ship: “It really started with Greg and his ability to sort of steady the ship to instill more confidence and more stability in the executive staff of the lottery,” he told CT Mirror. “It has taken a little bit of time, obviously, but he had already started the process of creating more stability, better morale, and a stronger sense of mission for the staff of the lottery.” He added, “I came in in May and immediately got to work on putting some of these issues behind us.”
Simmelkjaer was recruited directly by Governor Lamont after they met at a Chili’s Grill & Bar.
One who is skeptical about sharing sports betting with the Lottery is Senator Cathy Osten, who sponsored the bill that would give sports betting exclusively to the tribes. She says the Lottery needs to demonstrate that it is competently-led again.
