Connecticut Gov. Ned Lamont and leaders from the state’s two federally recognized tribes on Thursday morning announced a compromise that will allow sports betting and iGaming legislation to move forward. The new compact deal comes weeks after Lamont’s office announced an agreement with the Mohegan Tribe (Mohegan Sun Casino), angering the Mashantucket Pequot, who said they had not signed off.
The announced deal drops the tax rate on digital sports betting gross gaming revenue from 20% to 18% for the first five years. The Mashantucket Pequot (Foxwoods Casino) were seeking the lower tax rate. The deal is for 10 years with a five-year renewal option.
“We’re proud of this landmark agreement with the State of Connecticut that cements a historic moment for our Tribal Nation,” Mashantucket Pequot Tribal Chairman Rodney Butler said via press release Thursday. “This agreement bolsters the state’s economic development and growth, and allows us to develop a stable economic foundation for the future of our tribal community.”
East Windsor deal dead; other details
The new deal also requires the tribes to “halt development” on an East Windsor casino project that they were pushing for prior to the COVID-19 pandemic and has restrictions for the length of the agreement.
Other key details of the deal remain the same as what Lamont’s office released on March 3:
- Retail sports wagering revenue will be taxed at 13.75%.
- The Connecticut Lottery will be entitled to operate up to 15 retail sports betting locations and have one online skin.
- The lottery may sub-license an undisclosed number of licenses to the state’s parimutuel operator, Sportech.
- The lottery will commit to retail sports betting venues in Hartford and Bridgeport.
CONNECTICUT:
Sources say a deal between the state of CT and the Mashantucket Pequots (Foxwoods Casino) could come by the end of the week, clearing a path for lawmakers to legalize sports betting in the state.
Previously: https://t.co/OQQaE7U3xR
— Sports Handle (@sports_handle) March 18, 2021
“Our state’s tribal partners have worked with my administration thoughtfully, deliberately, and in a constructive fashion for the past few months, and we have achieved an agreement that is best for Connecticut residents and their respective tribal members,” Lamont said via press release. “We will work to see it ratified and look forward to doing so through a collaborative effort, to include working with elected leaders in the General Assembly.”
Said Mohegan Tribal Council Chairman James Gessner, Jr.: “This will allow Connecticut to generate tax revenues from sports and online gaming that are competitive with other states, to the benefit of both state and local municipal budgets, as well as our tribe’s members. We look forward to continued work with the General Assembly on this topic, especially the many dedicated legislators who have partnered with and supported Connecticut’s tribes throughout this process.”
In December 2020, with an eye toward an eventual agreement like this, DraftKings and Foxwoods leaders came to an agreement that will have the DFS-turned-sports betting giant run the tribe’s sportsbook operations.
With the addition of one online sports betting “skin” or brand for the lottery, it appears three’s company online rather than a Foxwoods and Mohegan online betting duopoly, which would still have been one more than the lottery-run monopolies as in Rhode Island and New Hampshire.
What about Sportech?
The deal paves the way for the state legislature to legalize sports wagering, iGaming, and iKeno, and likely mollifies all major players with the exception of Sportech, which earlier this month voiced its concern about mostly being left out of the deal. Sportech President Ted Taylor testified in early March that his company should be included in any sports betting deal, but also told the Public Safety and Security Committee that while his company was being kept abreast of compact negotiations, it did not have a seat at the table.
Following the initial announcement in early March, Taylor suggested his company might seek legal recourse. The outlined deal would give Sportech access to the sports betting market via a “sublicense” from the lottery.
“Just being given bricks-and-mortar sports betting is kind of like being given a Blockbuster and being asked to compete with Netflix,” Taylor told the Hartford Business Journal following the March hearing. “Right now there’s a little bit of exasperation.”
Sportech’s next move is unclear, but Thursday’s announced agreement removes the biggest hurdle the state legislature faced in terms of legalization.
