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Connecticut Announces Online Sports Betting and Casino Gaming Deal

Connecticut Announces Online Sports Betting and Casino Gaming Deal article feature image

Joseph Prezioso/AFP via Getty Images. Pictured: Connecticut Gov. Ned Lamont.

Connecticut officials revealed an online sports betting and casino gaming deal that will give at least one gaming tribe and the state lottery rights to statewide internet wagering.

Gov. Ned Lamont and the Mohegan Tribe announced a revised compact on Tuesday that would allow statewide mobile wagering. Once formalized, and subsequently passed into law by the legislature, Connecticut could finally legalize internet sports wagering and casino gaming after years of negotiations.

“The Mohegan Tribe is proud to have reached this agreement with Governor Lamont and the State of Connecticut,” Mohegan Chairman Jamie Gessner Jr. said in a statement.

“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. We’re thankful to Governor Lamont and his team, and we look forward to continued work with the General Assembly as this process continues.”

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Lottery Gets Sports Betting

The groundbreaking deal also allows the Connecticut Lottery an online sports betting license, as well as up to 15 retail betting locations. The lottery could sub-license some of its retail locations to pari-mutuel operators.

Additionally, the lottery will “undertake new retail sports betting venues” in the cities of Hartford and Bridgeport. Sen. Dennis Bradley, who chairs the committee undertaking the sports betting legislation and represents Bridgeport, has advocated for expanded betting options within his district.

If finalized, Connecticut would be the first state to license both a government-run lottery and tribal statewide mobile sports betting operator.

“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,” Lamont said in a statement.

“We are incredibly fortunate to have such a devoted partner in these efforts like the Mohegan Tribe, as they have been open to negotiation, honest discussion, and a positive path forward that is beneficial for both their tribe and the State of Connecticut.”

Additional Tribe Still Awaiting Deal

The state’s other gaming tribe, the Mesquot Pequot, was also “near the goal line” for a new deal, officials said during a General Assembly committee hearing Tuesday morning.

Pequot Chair Rodney Butler said his tribe was working through final details with the governor’s office. Withholding specifics, Butler said the holdup was over a “rounding error” for the state’s multi-billion-dollar budget but was a major revenue concern for his tribe. Butler hinted the sticking point was over roughly $1 million.

Butler said that between the two tribes, the new gaming compact would generate more than the governor’s estimated $45 in total new tax revenues for the upcoming budget. The Mohegan’s agreed to a 20% iCasino tax and a 13.75% sports betting tax, which is slightly above the national median average of roughly 10%.

Once finalized, the new compact would open the door for the two tribes to open retail sportsbooks at their respective casinos, as well as one online sports betting and casino skin apiece. Kambi and DraftKings already have operator deals with the Mohegans and Pequots, respectively.

Including the lottery, Connecticut would then have three sports betting skins. This would be the most of any New England state, though far less than high-grossing sports betting markets such as New Jersey, Pennsylvania, Colorado and Indiana, all of which have at least 10 live operators.

Next Steps

The 24-member, bicameral Joint Public Safety and Security Committee collectively sponsored the primary sports betting legalization bill. Several committee members praised the tribal casinos’ economic impact and touted online gaming’s potential at a committee hearing Tuesday before the deal was announced.

Many of those same members were far more critical of the lottery’s role. The lottery has drawn increased scrutiny after a rash of scandals and investigations led to multiple high-profile resignations and corruption investigations.

Lottery Chair Rob Simmelkjaer pushed for an online sportsbook license at Tuesday’s committee hearing as well as retail sport betting options for some of the state’s 2,900 lottery retailers. The deal announced later in the day indicates the quasi-public state lottery had reached a compromise with at least the Mohegan tribe.

It remains to be seen how lawmakers handle the lottery sports betting options, even with Mohegan support. The lottery is not included in the sports betting bill at the center of Tuesday’s committee hearing.

It also remains to be seen if the lottery betting options are holding up the Pequot’s commitment. Though retail betting options are typically a fraction of online betting, any competition could cut into Pequot’s revenues and could explain the “round error” preventing a deal.

Connecticut Gaming Background

The governor and tribes must finalize a new governing gaming compact before lawmakers can pass follow-up legislation to approve online sports betting and casino gaming. Connecticut gives the tribes certain exclusive casino gaming rights in exchange for a portion of revenues.

The Mohegan’s Mohegan Sun Casino and the Peguot’s Foxwoods Resort have generated billions for the state since they opened in the early 1990’s and remain two of the western hemisphere’s largest casino gaming centers. However, revenues have fallen steadily as more regional casinos opened, leading both the tribes and policymakers to pursue online gaming as a new revenue source.

Shortly after the Supreme Court struck down the federal sports wagering ban in May 2018, then-Gov. Dannel Malloy attempted a new compact with little success. Lamont, his successor, also couldn’t reach consensus with the tribes in either of the past two years.

In the meantime, New England neighbors Rhode Island and New Hampshire both launched statewide mobile sports betting.

Negotiations picked up after the tribes announced they would no longer pursue a new joint casino in East Windsor in the near future. With one political stumbling block at least temporarily removed, and both sides eager for new revenues in the COVID-19 pandemic’s wake, officials announced earlier this year a deal was imminent.

Several months later, at least one of the two major tribes are on board. The lottery’s involvement could mean another Connecticut betting option, but also throws another variable into complex and tense negotiations.

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