Connecticut Sports Betting Needs Compromise But Who Will Budge?

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Connecticut sports betting

There was an important word thrown around at Tuesday’s informational hearing on the future of Connecticut gaming and sports betting: compromise.

All of the involved parties – the Mashantucket Pequot and Mohegan Indians, Connecticut OTB operator Sportech and the Connecticut Lottery – agree there must be compromise when it comes to legalizing and operating CT sports betting.

That’s at least one positive to come from the Public Safety and Security Committee hearing held Tuesday.

Compromise takes compromise

The problem is none of them want to be the side that gives in. Legislators are getting a little tired of that, including Rep. Kurt Vail:

“I know this: I’ve been up here seven years on this committee. We’ve talked about this over and over and we end up with nothing because everyone takes their ball, goes in the corner and refuses to give an inch.

“And here we have, again it’s what, 2021? 2015 we were talking about this and we have nothing. So somebody needs to give up something and I think there’s a way for everybody to win.”

Bringing in other operators without the tribes’ agreement would be considered a “break in trust,” Mashantucket Pequot Chairman Rodney Butler said, but positive momentum continues.

“We are pleased to say that at present, we are in regular conversations with the governor’s office and we remain hopeful that we will reach an agreement that reflects the spirit of SB 146,” Butler added.

Proposed Connecticut sports betting legislation

Butler mentioned SB 146, which would let the tribes operate sports betting both at their casinos and online. The Connecticut Lottery could also expand into online sales for lottery tickets and keno.

The first five years of those operations could generate gross revenues of $690 million from sports betting and $850 million for iGaming, according to projections the Mashantucket Pequot cited from gaming consultancy Eilers & Krejcik.

It’s undetermined what the tax rate on those would be, but the Mashantucket Pequot assumed 8% for sports betting and 10% for iGaming. That would equal $55.2 million in taxes from sports betting and $85 million for iGaming over that period.

SB 146 has 17 sponsors from both chambers but it’s not the only CT sports betting legislation. Sen. Dennis Bradley filed SB 570, which also legalizes sports betting, iGaming and iLottery along with tribal casino in Bridgeport.

No matter the legislation, all parties appear to agree Connecticut needs to get moving on sports betting. Residents can already travel east for legal sports betting in Rhode Island. Soon, legal mobile sports betting could also be coming to its other border states, New York and Massachusetts.

Tribes claim Connecticut sports betting exclusivity

As is common when expanded gaming comes up in Connecticut, the operators of Foxwoods and Mohegan casinos say they have the exclusive right to sports betting. The claim is based on their interpretation of their compacts and language defining sports betting as a casino game at the federal level.

While the tribes believe they have the exclusive right, it sounds like they’re willing to play ball with the others in the state.

“We’re willing to talk and be reasonable and negotiate, that’s what partners do as they evolve and look at new things,” said Mohegan Tribal Chief of Staff Chuck Bunnel. “But let’s do no harm by bringing someone else into Connecticut that isn’t currently here and not part of this arrangement that has been so beneficial to all of us.”

Butler echoed the sentiment.

“We’re at the one-yard line and we just have to punch it in at this point,” Butler said. “And there are solutions for all of that. People just have to be reasonable and reset expectations. … They don’t just want to stay in their lane.”

Tribes could partner with Sportech

The “they” in Butler’s statement concerns Sportech, which holds the monopoly on parimutuel betting and operates 16 OTBs in the state.

Butler explained a plan for a handful of retail sportsbook locations throughout the state that would cost about $3 million to $5 million each. A way to avoid those costs could be to use some of those Sportech locations.

“Sportech has some venues that we could possibly consider if there is an expansion of retail sports betting in the state,” Butler said. “… There’s ways to thread the needle here, but all under the guise of our exclusivity.”

Retail betting not enough for Sportech

Retail sports betting at its OTBs simply isn’t enough, said Ted Taylor, Sportech’s president of its Venues business.

“We need both to survive properly and provide that all-encompassing gaming opportunity,” Taylor said. “Just having the bones of bricks and mortar – it’s kind of like there aren’t any Blockbusters. There’s not one Blockbuster in Connecticut because Netflix is the way it works right now.

“We need both and it just makes sense for that to be the way forward.”

In a post-pandemic world, he expects retail to only account for 20% to 25% of the Connecticut sports betting market.

Lottery’s odd one-two on sports betting

Perhaps the most surprising commentary came from Connecticut Lottery Chairman Rob Simmelkjaer.

“To bring sports betting out of the shadows, Connecticut is going to need a strong retail presence for the convenience of the player. … Many bettors will not want to set up online accounts or wager using credit or debit cards. They’ll prefer to wager using cash and they’ll prefer to wager in places where they can watch games with their friends at local businesses within their towns.”

He then immediately followed by saying 80% of revenue will come from online and denounced in-person registration.

“Requiring any sort of in-person activation hinders player interest and hinders participation,” Simmelkjaer said.

Unfortunately, none of the legislators on the call asked why bettors would not travel to a retail location to set up a mobile account but would have no problem regularly visiting that same location to place bets.