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Connecticut Senate Passes Sports Betting Legislation, Looks to Launch Ahead of 2021 NFL Season

The Connecticut Senate passed legislation shortly before midnight Wednesday that will expand the state’s tribal gaming options and allow for online and retail sports betting. The bill would enact a new compact between the government and the state’s gaming tribes once signed into law by Gov. Ned Lamont, who has championed the deal.

The Senate passed the bill 28-6. The House passed the bill earlier this month 122-21.

Sen Catherine Osten, whose district includes the state’s two tribal casinos, said she hopes Lamont signs the deal quickly and that wagering could begin ahead of the 2021 football season.

“Connecticut is on the cusp of providing a modern, technologically advanced gaming experience for our residents, which will be competitive with our neighboring states,” Lamont said in a statement announcing the original compact deal earlier this year.

Once signed, the deal goes to the federal Department of the Interior which is expected to approve the deal by June or early July.  More regulatory work remains before betting can begin, but Tuesday’s vote clears another key hurdle that increases the odds for a fall 2021 launch.

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Connecticut Details

Once approved by the Interior Department, the agreement will allow the Mohegan and Mashantucket Pequot tribes to open and regulate retail sportsbooks at their Mohegan Sun and Foxwoods casinos, respectively. The tribes can also open one online sportsbook and iCasino site apiece, but those will be regulated and licensed separately by the state consumer protections department.

Online sports betting is expected to make up 80 percent or more of the state’s sports wagering handle. The Mashantucket Pequot previously announced a deal with DraftKings, and the Mohegans will partner with Kambi.

This distinct online structure, included in the latest version of the legislation, should help the bill earn federal approval. Federal tribal gaming law and previous court rulings have prohibited tribes from opening online sportsbooks or casinos off tribal lands, but they are permitted to do so if regulated like a commercial entity.

Arizona tribes can open online sportsbooks under a similar arrangement in their compact the Interior Department approved Monday. Michigan tribes are also permitted to run online sportsbooks under a comparable state regulatory structure.

The deal also permits the Connecticut Lottery to open an online sportsbook as well. The lottery can also operate as many as 15 additional retail sportsbooks across the state, though none can be within 25 miles of the two casinos. The lottery is expected to partner with the state’s existing off-track betting facilities for many of these brick-and-mortar sportsbook locations.

No sportsbook can offer bets on in-state college programs such as the UConn Men’s and Women’s basketball teams.

The two tribes agreed to suspend plans for a third casino in East Windsor as part of the compact. The bill also specifically requires regulators to grant at least one retail sportsbook in the cities of Hartford and Bridgeport.

Neighboring Rhode Island has only one online and two retail books, all overseen by William Hill. New York is expected to approve four or more customer-facing online sports betting options later this year, but legal mobile wagering is not expected to launch until early 2022.

DraftKings oversees the lone legal online sportsbook in New Hampshire, the only other New England state with legal wagering.

DFS Operators Concerned

The bill that permits single-game wagering could indirectly prohibit daily fantasy contests.

The agreement would require DFS operators to be licensed, a move the industry largely supports. However, the language prohibits legal operators from offering contests during the regulatory review process, which could last months.

This means popular operators such as DraftKings and FanDuel may not be able to offer contests this upcoming football season, perennially the most popular sports for DFS players.

Additionally, the legislation permits only three legal statewide DFS licenses, all of which have to be partnered with one of the tribes or the lottery. This should not be an issue for industry leaders DraftKings and FanDuel, but would exclude all but one other daily fantasy operator.

Bottom Line

Legal online sports betting in Connecticut, one of the nation’s most affluent states and a piece of the New York metro area, will likely create one of America’s most lucrative per capita wagering markets. However, the limited licenses and possible DFS suspension are likely handicaps to the state market overall.

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