Connecticut Online Sports Betting Clears Most Important Hurdle

Connecticut Online Sports Betting Clears Most Important Hurdle article feature image
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John Moore/Getty Images. Pictured: Governor Ned Lamont (D-CT) speaks in Stamford, Connecticut.

Connecticut online sports betting could launch as early as this year after the governor’s office and one of the state’s major gaming tribes announced a finalized gaming agreement Thursday.

Gov. Ned Lamont and the Mashantucket Pequot tribe announced a deal that will allow the Foxwoods Casino operator to launch statewide mobile iGaming and sports betting. The Mohegan Tribe, operator of the Mohegan Sun, announced its own digital gaming deal earlier this month.

After several years and multiple governors failed to reach a deal, the groundbreaking agreement opens online gaming to operators of two of the world’s largest brick-and-mortar casinos.

“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. “Our state’s tribal partners have worked with my administration thoughtfully, deliberately, and in a constructive fashion for the past few months, and we have achieved an agreement that is best for Connecticut residents and their respective tribal members.

“We will work to see it ratified and look forward to doing so through a collaborative effort, to include working with elected leaders in the General Assembly.”

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Bill Details

The Pequots, Mohegans and the state lottery will be able to open online sportsbooks once lawmakers pass legislation to do so. DraftKings already has a deal with the Pequots and Kambi is partnered with the Mohegans. The Connecticut Lottery could also presumably strike a third-party partnership deal with another sportsbook brand.

The state would tax 13.75% of online sportsbooks’ gross gaming revenues, a rate higher than the 10% national median average. Online casinos would be taxed 18% of revenues for the first five years of the launch and 20% for the five years after that.

The lottery can also open as many as 15 retail sportsbooks. It can sublicense some of its sportsbooks to Sportech Ventures, which operates the stat’s off-track betting facilities. The lottery will also open retail sportsbooks in Hartford and Bridgeport.

Both tribes will halt plans for a new joint casino in East Windsor for at least 10 years, the duration of the deal agreed to this month. The deal includes a five-year extension option.

In his announcement press release, Lamont said this will “generate tens of millions of dollars in new revenue for the state” while keeping pace with other gaming measures in the region. Connecticut could be the third New England state with legal sports betting, after Rhode Island and New Hampshire, and the first with multiple legal operators.

Connecticut could also legalize sports betting ahead of New York, which seems close to a multi-operator sportsbook model. Connecticut would also be the first New England state with iCasino gaming, and just the third in the Northeast, after New Jersey and Pennsylvania.

Background

Former Gov. Dannel Malloy unsuccessfully sought a similar deal that united the state’s competing gaming interest before leaving office in 2019. Lamont, his successor, finally found a solution that appeased the two major gaming tribes and created new opportunities for the OTB’s, towns and the lottery.

Though the Mohegans agreed to the deal in early March, its success was in limbo the past two weeks as the Pequots worked through final details. Mashantucket Pequot Tribal Chairman Rodney Butler said during a March 2 legislative hearing his tribe was “near the goal line” but needed to work through unspecified final aspects of the deal before reaching an agreement.

That wait ended Thursday.

“We’re proud of this landmark agreement with the State of Connecticut that cements a historic moment for our Tribal Nation,” Butler said in a statement. “This agreement bolsters the state’s economic development and growth and allows us to develop a stable economic foundation for the future of our tribal community.

Next Steps

Finalized deals with the state’s largest gaming stakeholders should clear the way for a relatively seamless legalization effort.

A bipartisan, bicameral group of lawmakers had already introduced an online casino gaming and sports betting bill ahead of the deal’s announcement. As two of the state’s largest tourism and economic drivers, the tribes have significant political backing. This deal with the Democrat governor should jumpstart the legislative framework in the Democrat-controlled legislature.

Critically, the deal also ends concerns about the proposed East Windsor casino which had divided lawmakers and jeopardized legislative support. With that out of the question for a least a decade, there’s little politically that appears ready to slow down legalization.

Gaming is just one small part of the state’s myriad legislative endeavors this year, and it could take weeks before the bill passes the General Assembly and lands on Lamont’s desk. Regulating and licensing sportsbooks would then take several more months in a best-case scenario, meaning an online sportsbook launch wouldn’t likely come before summer 2021.

Still, this is a tremendous breakthrough after years in a political and legislative quagmire. All significant pieces are in place for legal Connecticut sports betting to launch before the end of the year.

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