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“The Connecticut Lottery Corporation is ready to operate sports betting,” a representative for the lottery testified on Monday.
Today, the Finance, Revenue and Bonding Committee held its first public hearing on its new sports betting bill.
According to Wagner and other representatives, the lottery is both well-prepared and well-suited to offer sports betting.
The CT lottery has a long history of providing adults throughout the state with a wide array of different games and play styles, giving players the ability to choose whatever games they find the most appealing. Sports betting would just be another option.
The bill is fairly permissive, also allowing for Connecticut sports betting through casinos, horse racing tracks and off-track betting facilities. There are provisions for mobile and internet wagering, too, as well as online lottery sales.
The latter components are the ones of particular interest to the lottery commission.
It has a mature partnership with Scientific Games, which provides the infrastructure for its in-person product. SG has the software to power online lottery and sports betting platforms, too, which it does in other jurisdictions. It provides the technology for parlay sports betting in Delaware, for example.
These online elements are perhaps most appealing to the lottery, as the actual sports betting provisions aren’t the friendliest for operators.
The only state to pass sports betting legislation in 2018 has been West Virginia, where the lottery will be in charge. In fact, all wagering in that state will take place via the lottery, which is not the proposal in Connecticut.
This new bill follows a modified blueprint that has appeared in at least three states, including New York and Kansas. It borrows some requests favored by the NBA and Major League Baseball, but it reins in their control over the industry. Among other things, it limits the size of their integrity fee and the scope of their control over data.
The leagues have expressed some reluctant support for this model in recent weeks, most recently in Kansas.
During Monday’s hearing in Connecticut, they once again testified that they would yield to the changes “in the spirit of compromise.” Although they’d like to see some of the specifics adjusted, the leagues acknowledge that the framework of their request is honored in S 540.
Sportech, which operates several OTBs in the state, also testified in support of the bill. Adding the support of the lottery would seem to make this new, amended blueprint more likely to stick in Connecticut.
The state’s two gaming tribes, the Mohegan and the Mashantucket Pequot, are definitely interested in sports betting — and all forms of iGaming. But both submitted testimony that pushes back on the details of this bill.
Most notably, the tribes are unimpressed with the idea of paying an integrity fee, even a reduced one. Seth Young did not mince words in his written testimony on behalf of Foxwoods:
Let’s start with the proposition of an integrity fee – which I’d prefer to call a royalty fee – pitched by the representatives from Major League Baseball and the National Basketball Association. This proposed royalty fee 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.
Young also presented arguments against the leagues’ ability to restrict wagers and limit data sources under the current proposal. He contends that the bill, as written, would deter operators and bettors from a regulated marketplace.
Aviram Alroy testified on behalf of Mohegan Sun. He speaks with some lateral expertise, having overseen the operations of Mohegan Sun online casino in New Jersey for several years running. Alroy echoed the words of Young, arguing that the “devil is in the details” when it comes to creating an appealing market.
Tribal chairs backed their counsel up with some pointed testimony of their own.
Rodney Butler (Mashantucket Pequot) and Kevin Brown (Mohegan) highlighted the financial relationship between the tribes and the state, including this in bold type. “This exclusive relationship has resulted in over $7.5 billion in revenue to the State of Connecticut since inception.”
The tribes share 25 percent of slot revenue with the state in exchange for gambling exclusivity. The state depends on that revenue, and it hinges on restricting expansion of other “video facsimiles and commercial casino games.”
Throughout the testimony, there are carefully worded cautions against passing sports betting legislation that ignores those agreements:
We look forward to working with the State on these important gaming initiatives, but remind the Committee that it must be done within the context of those long standing agreements in order to protect the slot contributions to the State.
The tribes’ desire to offer sports betting is no surprise, as they likely expect to be granted exclusivity under their compacts. That’s a whole separate issue, though, a large one that lawmakers have yet to tackle directly.