After more than three years of conversation and countless hours of hearings, Connecticut’s Joint Public Safety and Security Committee finally moved a package of bills that support and complement Gov. Ned Lamont’s HB 6451, the key bill that represents the state’s gaming compact agreement with the Mashantucket Pequot and Mohegan tribes that was announced last week.
Should the bills become law, Connecticut would become the third state behind Michigan and Pennsylvania to legalize mobile/online sports betting and iGaming in one fell swoop.
The four most relevant sports betting bills were handled at the top of the committee meeting — the last one of the session and ahead of a key legislative deadline. The meeting took nearly two hours to get through, mainly because one representative is clearly not on board with the idea of Connecticut’s two federally recognized tribes, the Mashantucket Pequots (Foxwoods) and Mohegans (Mohegan Sun), maintaining a near duopoly on gaming.
The bills would legalize retail and digital sports betting, iGaming, iLottery, and iKeno. While there has been pushback from the state’s only parimutuel operator, Sportech, and some lawmakers in its camp, every key gaming stakeholder will get at least a sliver of the pie. The new compacts allow for statewide mobile sports betting and give each tribal casino and the state lottery one skin each. Sportech will be entitled to offer sports wagering at brick-and-mortar sportsbooks under the details of the compact, but it has made it clear it wants more and will consider legal action to get it.
Legislation should move quickly
That aside, lawmakers have, on balance, been in support of the tribes from the beginning, and it’s likely they’ll move this legislation fairly quickly. Mashantucket Pequot tribal Chairman Rodney Butler has said he expects sportsbooks to be able to take bets by the 2021 NFL season. His tribe’s casino has already partnered with DraftKings in anticipation of legalization. Mohegan Sun hasn’t disclosed how its book will be branded, but the back end will be powered by software and risk-management supplier Kambi. The DraftKings platform is currently run by Kambi, but the company has a new partnership with SB Tech and is expected to roll out a new platform later this year.
FanDuel and other major operators will try to find a way into the market, but options will be limited. The Connecticut Lottery is currently partnered with Scientific Games, which has its own partnerships with multiple sports betting operators, including Caesars and Flutter Entertainment (FanDuel’s parent company). It also has an iGaming deal with BetMGM.
Perfect now who will pick the odds… Sports betting soon to be approved in Connecticut… https://t.co/dL7sTIS685
— Cathy Osten (@CathyOsten) March 20, 2021
Lamont’s bill lays out the framework for legal sports betting, as agreed upon with the tribes. The negotiations sometimes got contentious, but in the end, resulted in a deal with an initial 18% tax rate on gross revenue digital revenue for sports betting (and 13.75% on retail) that will also have the state paying the tribes 25% of its keno revenue, and allows for some additional but limited market participation by the state lottery. The tribes already pay the state 25% of slot revenue.
“The sign of a good deal is that no one walks away happy,” quipped Butler during a “New Normal” tribal webinar hosted by Victor Rocha Wednesday. “There are still a lot of components that I would like to push back on, and we’d be at the table for five more years, but at some point, you have to think about your people.
“I’m optimistic we’ll have this passed in the next month or two … and we’ll be betting on the NFL season this coming fall. Certainly a weight has been lifted off our chest, we got a fair shake from this administration vs. other administrations.”
Tuition break, consumer protections
Lamont’s bill and the other three remain works in progress, according to committee co-chair Maria Horn. But with a deadline looming and years of work behind a gaming expansion, lawmakers were overwhelmingly willing. Lamont’s bill passed, 20-2, to move forward with the idea that more work must be done.
The other three bills deal with how revenue will be spent, a Bridgeport casino project, and consumer protections:
SB 146 is the bill introduced by Sen. Cathy Osten that first got the sports betting and iGaming discussion started in Connecticut. The bill has evolved over three-plus years, and Osten said that at this point the key component is directing new gaming revenue to tuition-free community college. It also “codifies” Lamont’s compact with the tribes.
SB 570 allows for the Mashantucket Pequot and Mohegan tribes to build and run a casino resort in Bridgeport. Rep. Craig Fishbein, who is against all of the legislation, also pushed back on this bill, saying that he expects legal action because commercial interests are left out. “This statute, if it were to pass, is definitely unconstitutional.”
HB 6512 outlines consumer protections, including a list of those prohibited from wagering (including athletes, coaches, etc.), requiring operators to identify at-risk gamblers, outlining advertising standards, and calling for the creation of a self-exclusion list.
🆕Together with the Mohegan Tribe and Mashantucket Pequot Tribe, we have reached an agreement that will allow for the modernization of gaming options available in Connecticut, including through sports wagering and online gaming.
— Governor Ned Lamont (@GovNedLamont) March 18, 2021
Should state be giving tribe near exclusivity?
The most pushback during Wednesday’s hearing came from Fishbein, who is not comfortable with the idea that Connecticut is “limiting its options” and will fail to have the more open, competitive marketplace that many other states have. For example, bettors can or will be able to choose from more than a dozen mobile/online sports betting platforms in states like Colorado, Michigan, New Jersey, or Virginia. Conversely, the New Hampshire Lottery gave DraftKings a monopoly, the only mobile wagering option in Oregon is through the state lottery, and Rhode Island has two casinos, but the digital platforms are both run by IGT.
Fishbein argued on every bill that the marketplace should be more inclusive. He repeatedly pointed to the compact negotiations — which in every state are protected by non-disclosure agreements — as being “back-room meetings.” He also suggested that any legislation should include a payout such as a “royalty fee” to the professional sports leagues and NCAA, though no legal U.S. jurisdiction has included one to date.
“We have a chance to not be selective,” Fishbein said. “If we had a chance to open up this sports betting aspect to more people, we might make more money. I think the public, if we’re going to do this, should be at the table, that I should be able to run a sports betting operation if that’s what I want. I find heavy disfavor with our governor saying to the general public, ‘I don’t want to talk to you.’
“By virtue of the back-room meetings that took place, there is no integrity. But I stand alone. There are no consumer protections if there is only one entity licensed.”