Better Luck Next Year: Governor’s Connecticut Sports Betting Efforts Stall

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Connecticut sports betting

Put away whatever hope remained for Connecticut sports betting in 2018.

Connecticut Gov. Dannel Malloy abandoned this week a potential special session to address sports betting legislation after failing to reach consensus with legislative leaders. The state passed a sports betting law in 2017, but tribal issues and expansion questions persist. Connecticut also did not issue regulations based on the earlier law.

A report in the Republican-American of Waterbury cited resistance from legislative leaders as Malloy’s reason for stopping talks with tribal officials. Even with legislative support, Malloy’s talks with the tribes enjoyed no guarantee of success.

Connecticut sports betting falls behind the pack

The calendar did not work in favor of Connecticut sports betting being reworked this year. The Supreme Court struck down the federal ban on single-game wagering on May 14, five days after the Connecticut legislative session ended.

Malloy quickly mused on the possibility of a special session on sports betting. The Nutmeg State faces some urgency to move because regional competition is burgeoning.

New Jersey sports betting launched in June and Pennsylvania sports betting looks like a possibility for fall. Rhode Island also will start before the end of 2018 and New York could pass sports betting legislation in 2019 as well.

The road to Connecticut sports betting

State legislators resisted a special session despite Malloy’s negotiations and this quote from Rep. Vincent Candelora sums up their reasoning:

“I think it is a complicated issue that is probably more appropriately addressed in a long session with public hearings because the scope of the issue is not just sports betting. It is potentially online gaming as well, which has broad implications for the state of Connecticut,” Candelora told the Republican-American.

The state legislature will not reconvene until early 2019.

Tribal issues still need attention

The broadest implication for Connecticut sports betting relates to tribal interests. The Mashantucket Pequot (Foxwoods) and Mohegan (Mohegan Sun) tribes operate the state’s two casinos.

Their compact with the state delivers 25 percent of their slot revenue to Connecticut. That represents significant money: the state put $270 million into its budget from the tribal slot payment in 2017.

Tribal leaders believe they hold an exclusive right to offer Connecticut sports betting and threatened to stop those payments if the state violated that.

“We are bullish on the potential for sports wagering to assist us in growing our business and promoting tourism in Connecticut,” said Chuck Bunnell, Mohegan Tribe chief of staff of external and governmental affairs, told CNBC in July.

Attorney general disagrees with tribes

State attorney general George Jepsen wrote an opinion in April that rejected the tribal claim to exclusivity. It reads in part:

In the event PASPA is struck down and state law continues to prohibit sports wagering (as it presently does), because sports wagering is a Class III game under federal law and is not an authorized game under either of the respective Compacts, the Tribes would still be prohibited from conducting sports wagering on their reservations.

Moreover, it is our opinion that if sports betting were to become lawful in Connecticut, the Tribes would not have an exclusive right under the existing Compacts and MOUs to offer it … Sports betting is not listed as an authorized game.

Malloy began negotiations with the tribes earlier this summer and said he felt a consensus could be reached. Without agreement from the legislature to pass new sports betting legislation, though, the governor halted talks.

Malloy will not be in office in 2019, as Connecticut will elect a new governor after his two terms.