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One of the two Native American tribes in Connecticut is asking lawmakers to move forward with sports betting.
On Thursday, a representative of Foxwoods Resort Casino — backed both sports betting and online gambling in a public hearing about expanded gaming in the state. The state has already passed a sports betting law pending a potential change in federal prohibitions.
Seth Young, Foxwoods’ Executive Director of Online Gaming, delivered the testimony before the Public Safety and Security Committee in Hartford. Young called iGaming a “more lucrative opportunity for the state than sports betting,” but he wrote a fair amount about the latter, too.
Foxwoods is owned and operated by the Mashantucket Pequot Tribe.
Any legal sports betting in the state would take the US Supreme Court striking down the federal ban outside of Nevada in the New Jersey sports betting case.
Young got right down to business in his written testimony:
I am here to express the Mashantucket Pequot Tribal Nation’s support for legal sports gambling – both on-reservation and online – and more broadly, for regulated online gambling.
Young cited the growing national interest in the issues and the potential financial benefits for the state. He also pitched the importance of “brand trust” in iGaming and sports gambling.
“For 26 years, Foxwoods has been a brand that consumers know that they can trust for a fair game and a great experience,” he wrote. “This state needs trusted partners to stand behind a strong program in order to restore the trust in iGaming and protect its constituents from dishonest operators.”
It’s a good way to argue that the tribes should be the ones offering Connecticut sports betting.
We’ve known for a while that the tribe appeared to support lifting the ban on sports betting, but this is its first substantial testimony to that stance.
Under existing agreements, the Mashantucket Pequot and Mohegan tribes have exclusive rights to offer gaming in the state. In exchange, they return 25 percent of their revenue to the state. Any further expansion of gaming must be done with respect to those agreements.
Although they don’t specifically cover sports betting, the presumption is that commercial sports betting would be an infringement. The tribes certainly feel that way.
It’s still not clear whether they intend to operate sports betting as a tribal enterprise or as a joint commercial venture with the state. The latter is the case for brick-and-mortar casino gambling on non-tribal land. Either way, though, they want exclusive rights to offer it. Or at least use the exclusivity agreement in the state as leverage.
It’s not all about revenue, either, as tribal priorities are slightly different from commercial casinos’. Gaming operations are locally driven, primarily providing employment and income for members of the tribe. Protecting sovereignty and shunning infringement are of the utmost importance to tribes.
Young’s written testimony is four pages long, densely packed with strong quotes. Here are a couple others:
The section on sports betting immediately addresses the controversial integrity fee sought by pro sports leagues:
“This proposed royalty fee, which equates to 20% of the revenue derived from a sports gambling operator, goes directly against the interest of good public policy and social responsibility in any state considering sports gambling legislation. The leagues’ position is somehow premised on the illogical assumption that it will cost more to ensure the integrity of a fully transparent regulated market than it does to ensure that level of integrity in the black market they’re currently facing; that’s simply absurd.”
State lawmakers are operating under the assumption that they’ll see $40 million to $80 million in annual tax revenue. Young corrected those numbers based on Foxwoods’ projections:
“We estimate that the entire sports gambling market opportunity in Connecticut is worth between $75M to $105M per year, split between all operators, before any operating costs or taxes are contemplated. Based on our market estimates coupled with a pragmatic tax rate, we estimate Connecticut can collect $6.5M in tax revenue after Year One of operation, escalating to $9.1M by Year Five of operation, for a total of $40M in new tax revenue over the course of five years.”
Although Foxwoods support sports betting, that doesn’t necessarily clarify things very much. According to Young, they still want to be the owners of the industry under their compacts.
“While I am not a lawyer for Foxwoods or the Tribe,” Young wrote, “I will also state for the record that I know the tribes believe sports gambling, daily fantasy sports betting, and iGaming fall under the exclusivity agreement.”
The state, on the other hand, argues that sports betting is flatly not covered by the compacts. It has no issue with the tribes offering sports betting, but it doesn’t think the privilege should be exclusive. The same debate is under way regarding the state’s daily fantasy sports legislation, which requires tribal approval.
The conversation is mostly amicable so far, but both sides may need to make compromises to proceed with sports betting.