Whether Connecticut sports betting constitutes a casino game was a key part of the discussion Tuesday in a committee hearing.
The Public Safety and Security Committee listened to testimony on its new committee bill that would authorize CT sports betting at tribal casinos, off-track betting parlors and via the Connecticut Lottery.
The inclusiveness of H 7331 differs from bills discussed in committee two weeks ago. Those would give the state’s two gaming tribes — the Mashantucket Pequot (which operates Foxwoods) and Mohegan Tribe (which operates Mohegan Sun) — exclusivity to operate Connecticut sports betting.
The memorandum of understanding (MOU) under which the tribes operate with the state gives them an exclusive right to casino games.
Definition of casino games admittedly ‘murky’
George Henningsen, chair of the tribal gaming commission for Foxwoods, argued CT sports betting is a casino game because when the MOU was struck in 1994, Nevada casinos were the only offering legal sports betting in the United States.
However, Henningsen admitted the situation is murky, as there is no legal definition to casino game.
“The casino game phrase used in the MOU is not specifically defined within either of the compacts, so casino game is up in the air,” Henningsen said. “There’s no definition, and the problem is that until it gets litigated, there won’t be a definition you can point to.”
Rep. JP Sredzinski pointed out that the tribes have lottery scratch-off tickets in their casinos, yet that doesn’t make lotteries a casino game because lottery tickets are sold throughout the state and that doesn’t violate the MOU.
“It seems to me that the tribes are trying to exploit the state of Connecticut when it comes to the MOU,” Sredzinski said. “… To not have a definition for a casino game but then say sports wagering is a casino game so we need exclusivity to that just flies in the face of common sense to me.”
Tribes standing their ground on exclusivity
Henningsen admitted his office is not certain how a court might resolve the question of if Connecticut sports betting is a casino game. He repeated the tribal stance that allowing sports wagering off tribal territories would be in violation of the MOU and cause the tribes to stop their slot machine payments, which can reach in excess of $250 million annually, to the state.
Committee Chairman Joe Verrengia pushed back that tribes made their point very clear in the last two hearings with their threat to cut off payments and litigate any presumed violation of exclusivity. He said tribes should be aware that this doomsday scenario also would negatively impact them.
“It’s my hope that, at the end of the day, stakeholders can get together and consummate a deal that’s fair for everyone. I just think it’s important for everyone to realize that there are options pursuant to those MOUs or compacts that the state has, and we’ll leave it at that.”
Possibly allowing a ray of hope for a compromise, Henningsen remembered how the tribes and lottery worked out a deal regarding keno,.
A negotiation will be needed for CT sports betting to be added as an approved game in each tribe’s compact with the state.
No integrity fee in proposed partnership
Dan Spillane, senior vice president and assistant general counsel for the NBA, came back to say he is happy to see the committee incorporated a partnership with professional sports leagues into the bill as discussed in the previous hearing.
However, he lamented the language was missing one thing — the integrity fee or royalty from Connecticut sports betting that would pay for the partnership.
As he explained previously to Legal Sports Report, Verrengia would like to have the state get something out of iworking with the leagues on sports betting — a commitment to promoting sports activities and economic development in the state.
The bill doesn’t set any specifics as to what the partnership would entail, other than setting a goal for scheduling three major league sporting events in the state each year. It leaves the details of the partnership, including payment to the leagues, up to the Commissioner of Economic and Community Development.
Spillane held up a quarter and said:
“Just to remind you, we’re looking for a quarter percentage point of the amount bet on our games. … That’s an amount that comes from the operators, not from the state. If a hundred dollars is bet on an NBA game, this is what we would get.
“The main beneficiaries of opening up sports betting are still going to be the operators and the state, but we think in order to have a fair framework that takes into account that we’re the content creators and ones who take on risk, and also to motivate us to invest in making sports betting a success in Connecticut, giving sports leagues a seat at the table and a stake in the business outcome is something that would be sensible for everyone.”