The movie Groundhog Day was brought up multiple times at the first Connecticut sports betting hearing of 2020.
For many years, Connecticut sports betting or other gambling expansion has come up in the legislature. The same arguments are heard regarding tribal exclusivity, and the same threats are made about lawsuits.
Ultimately, efforts to modernize the industry to be more competitive with surrounding states fail because any action seems like one that will face the consequences.
The radio alarm might as well have gone off with Sonny & Cher’s “I Got You Babe” before Tuesday’s hearing in the Joint Committee on Public Safety and Security.
CT sports betting never will be simple
Last year, Connecticut focused on passing comprehensive gambling expansion involving additional casinos and internet gaming, in addition to sports betting.
After that went nowhere, Gov. Ned Lamont told reporters entering this year that he wanted to simplify the efforts, focusing on internet lottery and CT sports betting.
In his State of the State address, Lamont doubled down in calling for the legislature to pass a bill to legalize sports betting.
Tuesday’s hearing showed that the same issues exist between industry stakeholders and the state even when the topic is limited to sports betting, frustrating lawmakers.
“I don’t understand why, when there could be a great benefit to all players involved, we can’t come up with something where we’re all part of it,” Rep. Russell Morin said. “This is not anti-anybody, it’s just why can’t we get something done? That’s my stance and I’m getting tired of sitting here listening over and over and over again to the same questions and same dialogue, but there’s really no solution.”
Is sports betting a casino game?
Connecticut’s two Indian tribes — Mashantucket Pequot and Mohegan — entered compacts with the state 27 years ago, giving them exclusivity to offer casino games. In return, the tribes pay the state 25% of slot revenues, a figure that is nearing a combined $9 billion over the term of the memorandums of understanding.
At the hearing, representatives from the two tribes argued that sports betting in Connecticut is a casino game, giving them exclusivity over its offering in the state. Representatives from the Connecticut Lottery Corporation and Sportech, which operates off-track betting parlors in the state, argued that their entities should be allowed to participate in CT sports betting.
“We believe sports betting is absolutely a casino game and have been consistent, and things have come out from the only federal agency that regulates gaming [National Indian Gaming Commission] that that’s there position also,” said Chuck Bunnell, chief of staff for Mohegan. “We believe it’s a casino game and would have been in the compact if not illegal at the time federally.”
On the other hand …
Rep. Kurt Vail pointed out that common sense told him sports betting is more like horse racing than it is a casino game such as blackjack. He believes that bets on races and football games should be allowed in the same place.
Rep. Joe Verrengia, the co-chair of the committee, read a definition that provided a fundamental difference between casino games and sports betting. Casino games are games of chance, and sports betting when done well takes skill. He added that sports wagering centers on the results of sporting events that don’t take place in casinos.
“Rather than trying to argue what the legal definition is or whether it’s covered under exclusivity or not, let’s see if we can come to some sort of compromise. I think if it’s the tribes’ position that they have exclusivity when it comes to sports betting, it’s going to be very difficult to move this sports betting or gaming policy forward like it has been for the last three or four years.”
Any way the legislature goes could result in a lawsuit
The only common ground stakeholders found at the hearing is that they all agree that whichever entities the legislature authorizes to offer sports wagers, it will result in a lawsuit.
If the tribes get exclusivity over CT sports betting, the off-track betting parlors will sue. If anyone else is allowed to participate, the tribes will sue.
“You’re going to get sued, period,” said Rodney Butler, chairman of the Mashantucket Pequot. “Let’s just accept that as what’s going to happen and move on. The difference is, if we end up in court, that’s $250 million a year.”
What’s at stake in CT
The tribes again are threatening to cease their annual slot payments totaling about $250 million to the state if they feel their casino games exclusivity is being violated. George Henningsen, from the Mashantucket Pequot Tribal Gaming Commission, said it wasn’t worth the state risking $250 million a year to go after the $15 million or less it might make from sports betting.
“We’re basing our decisions or definitions on the future of sports betting based on language that was 30 years ago,” Verrengia said. “Our compact does not recognize the present gaming landscape not only here in the state of Connecticut but across the country.
“Maybe that is what we should really work on to move our gaming forward is looking at that compact and not having it run in perpetuity because that’s where I see a lot of this discussion originates from.”
New committee co-chair supports tribes
A positive for the tribes was that they have strong support from Sen. Dennis Bradley, the new co-chair of the committee from the Senate side.
Representing Bridgeport, Bradley backs S 21, a proposal from Sen. Cathy Osten that is the tribes’ choice for a CT sports betting vehicle. The bill would also give the tribes an option to build a casino in Bridgeport.
“The options that we have are either honor our compact and get the revenues and projections that no one else is making to the state of Connecticut or violate our compact and pass legislation that says we can now open it up to whoever would like to have it and no longer get those revenues from the tribes and ruin the compact we have,” Bradley said.
Another Connecticut sports betting bill coming
Tuesday’s hearing was an informational one that didn’t focus on any one bill. The committee opened by voting to allow S 21 to be drafted into legislation.
Verrengia teased that he too would be coming out with a bill soon, one that is more inclusive. He said his bill would be limited to gaming companies that have a physical presence in the state: the tribes, lottery and off-track betting parlors.
Verrengia explained the bill:
“It’s my hope that the state can continue to work with our tribal friends to reach a mutually acceptable agreement that’s not only good for the state of Connecticut, but also good for the other stakeholders. We have other businesses like the OTBs who have an investment in the state and an investment in jobs. They are licensed to run gaming as well as you. Let’s take care of those entities that are presently licensed in the state of Connecticut and let’s move our sports betting policy forward.”
Butler said if tribes were granted exclusivity over sports betting, they might partner with Sportech, presumably to operate the “entertainment zones” permitted in S 21 or convert their existing OTBs into such facilities. Butler described entertainment zones as sports betting facilities.
Gregory Smith, president and CEO of the Connecticut Lottery Corporation, offered projections that if the lottery were allowed to participate in sports betting along with the tribes and OTBs, the lottery alone would generate $25 million in revenue for the state in year one.
“As a sports betting operator, we would return all of our proceeds to the state, not just a small taxation on net sales,” Smith said. “We believe the revenue potential sports betting offers to the state of Connecticut is significant, but only if the Connecticut Lottery is substantially involved.”