Heads up: any company interested in partnering with the state lottery on CT sports betting needs to make its stance known quickly.
The Connecticut Lottery published its request for qualifications concerning potential sports betting partners Monday. All responses are due April 23 at 3 p.m. local time, though, which does not leave much time.
The reason for the accelerated RFQ period is the hopeful quick launch of sports betting in Connecticut:
“There is a hope to launch sports betting in Connecticut by the start of NFL season,” Lottery Chairman Rob Simmelkjaer told LSR. “That’s been articulated by the governor, by the leaders of the tribal nations that are going to be our partners slash competitors in the state.
“It’s an aggressive timeline – not sure that it will happen. But we’ve created a timeline that at least leaves that possibility open.”
What does ideal CT sports betting partner bring?
The RFQ does not have a specific scoring guideline set out. The Connecticut Lottery will look at each bid holistically and decide on the entire package, Simmelkjaer said.
That said, there are a few key factors that will be considered:
- Product “is very high” in terms of importance, Simmelkjaer said. That’s not just the app itself but also the pricing, he added. “We’re going to be a market with three competitive entities so we expect there will be a need to be competitive and fair in pricing structure,” Simmelkjaer said.
- Along with product and pricing will be customer acquisition and retention.
- Operating retail sports betting: Ideally, everyone in Connecticut will have a retail sportsbook within a 30-minute drive, Simmelkjaer said. “Retail is important,” he added. “It’s something we spent a lot of time thinking about and working on in the process of negotiating this deal with the administration and the tribes.”
- Responsible gambling
The only limiting factor on who can apply is operating in a minimum of three jurisdictions, whether in the US or internationally. Because it is a B2B operator and routinely powers more than one sportsbook in a state, Kambi could still bid despite its partnership with the Mohegan.
Whether DraftKings Sportsbook can apply depends on its status with Foxwoods Casino. Simmelkjaer noted DraftKings partnered with the Mashantucket Pequot Indians in December and he anticipates the two will be working together on CT sports betting.
Connecticut sportsbook plan details
The recent agreement between Gov. Ned Lamont and state gaming tribes sets up CT sports betting as follows:
- Sports betting revenue will be taxed at 13.75%.
- The Mohegan (partnered with Kambi), Mashantucket Pequot (partnered with DraftKings Sportsbook,) and Connecticut Lottery get online skins.
- Along with its online sportsbook, the Lottery can also operate 15 retail sports betting locations. Current provider Sportech can sublicense those locations.
- The Lottery will build retail sports betting venues in Bridgeport and Hartford.
- The term is 10 years with an option to extend for five more.
The plan still requires some legislative approvals of certain provisions.
Connecticut Lottery expects strong revenue share
Add the Connecticut Lottery to the list of northeastern states interested in a healthy share of sports betting revenue:
“We would like to be very competitive on the revenue share front, no question about it,” Simmelkjaer said. “We think that even though we’re not a monopoly there are only three ways into this state, it’s an attractive market, it’s a market especially for companies that have market access in neighboring states there’s going to be some efficiency potentially to customer acquisition which gives us an argument for a very strong revenue share.
“And we also feel as Connecticut Lottery with both our brand and our existing reach when it comes to people in the state – we have almost 3,000 retailers in the state. They won’t all be taking sports bets but they’re all touch points that we can use potentially as we look to acquire customers. So we expect that we’re going to be a very good partner in our own marketing and the way we help whatever partner it is acquire customers.
“So all of those things combined – and not to mention, lastly, our exclusive retail rights around the state – we think all those things combined put us in a position to drive a very strong revenue share.”
DraftKings won the exclusive rights to mobile and retail sports betting in New Hampshire by offering at least a 50% revenue split. Gov. Andrew Cuomo crafted his NY sports betting model on New Hampshire and expects a minimum split of 50%.
The more focus on nearby states, the better
Simmelkjaer pointed to the media markets surrounding Connecticut and how that advertising can help the Lottery’s eventual program.
The RFQ mentions the CT Lottery is interested in market access details and plans. That includes an emphasis on surrounding states including New Jersey and New York.
“There certainly are some efficiencies that may be gained from a company that is investing heavily in media in the New York market, and a lot of them already are to reach New Jersey,” Simmelkjaer said. “Now, if they’re also trying to reach the New York market and part of our state is within that media market as well, that’s certainly something potentially will be a factor for success in developing the Connecticut market.”
Multiple steps left in CT sports betting process
The Connecticut Lottery is moving quickly. The RFQ outlines formal proposals are due May 10, with presentations beginning April 27. But there’s still a lot to be accomplished to legalize CT sports betting.
First, multiple pieces of legislation need to be approved by the state legislature. The compacts with the Mashantucket Pequot and Mohegan Indians then need to be amended and approved at the federal level. Finally, sports betting regulations need to be drafted and finalized.
The timelines in the RFQ could be extended if the launch date is pushed back. But if the start of the NFL season remains the target, Simmelkjaer expects bidders will be ready.
“We think most of the likely bidders are companies that do this all the time. They know how to handle these things, so we expect to hear from folks that can handle the timeline,” he said.
