It appears four sportsbook operators have the inside track to the final CT sports betting skin.
Out of 15 respondents to the Connecticut Lottery‘s request for qualifications, the Lottery asked for just five to give formal presentations, Chairman Rob Simmelkjaer said at an executive committee meeting Thursday.
The Lottery specifically asked only four of the five to respond to the CT sports betting RFP, which went live Monday.
“The companies who were invited were invited primarily based on their qualifications that were presented and based on our expectation of the law, the language of the law that we expect to be in the bill to be voted on by the legislature,” Simmelkjaer said. “So we invited companies that we felt were capable of complying with that likely legislative language, as well as companies that fit with our current business strategy about how to execute sports betting in the state.”
CT sports betting language up in the air
Even though just four were specifically asked to respond, the RFP is open for anyone to answer. Those formal responses are due May 27, but that is contingent on Gov. Ned Lamont.signing legislation.
The House will introduce the bill in “fairly short order,” Simmelkjaer said. The Lottery expects to announce its partner June 10.
Simmelkjaer also added what the Lottery is looking for in a partner could change if legislative language changes. He did not get to complete the thought as technical problems interrupted the call.
For now, the Lottery expects to operate one online sports betting skin, as well as up to 15 retail locations. That is based on public details of the gaming expansion agreement the state has with its two tribal partners.
Pricing proposal breakdown
The Lottery also uploaded an addendum to the RFP, which included requests for details on “primary economic features:”
- The minimum capital investment for retail, which excludes system equipment.
- The maximum deduction of annual costs (both including and excluding marketing and promos) from gross gaming revenue before the revenue-share calculation.
- The guaranteed minimum revenue share for each year of the 10-year license if it is higher than the Lottery’s acceptable minimum revenue share. The Lottery wants a minimum of $5 million in year one and $10 million in years two through 10.
- A clear example of the proposed revenue share breakdown. Simmelkjaer said he expects that revenue share percentage to be “very competitive.” Nearby New Hampshire gets 51% of the revenue from DraftKings Sportsbook. Bidders for sports betting in New York must offer at least a 50/50 split.
Respondents are also encouraged to include alternative revenue share figures. This includes “unique customer acquisition opportunities” or a sliding share at certain market share or revenue levels.
Mohegan expect $200M revenue for CT sports betting
The Mohegan Indians, who partnered with Kambi for their sports betting skin, think the market will hit $200 million in revenue by year five.
That is according to a breakdown provided in Mohegan’s fiscal second-quarter earnings presentation:
- Year 1: $119,5 million
- Year 2: $144.8 million
- Year 3: $166.6 million
- Year 4: $186.6 million
- Year 5: $205.2 million
Connecticut will also legalize iGaming, which is typically a bigger market from a revenue standpoint. That revenue should hit $410.4 million in year five, according to Mohegan.