The big news at Connecticut’s latest sports betting hearing wasn’t that lawmakers moved sports betting forward (they didn’t). It was that after four-plus years of discussion, negotiation, and sometimes major disagreement, the state and at least one of its two tribes have reached an agreement regarding the implementation of legal sports betting and multiple forms of digital gaming. With regard to negotiations between the tribes and the state, nearly every key party used football references, so suffice to say, there’s seconds left and it appears the ball is about to be punched into the end zone.
The Mohegan Tribe has already reached an agreement with the state, said representatives from both Gov. Ned Lamont’s office and the tribe, while the Mashantucket Pequot (Foxwoods Casino), according to tribal Chairman Rodney Butler, is at “fourth-and-inches” in terms of an agreement. According to the Connecticut Mirror, the Mashantucket Pequot are seeking a lower tax rate than the Mohegans agreed to for iGaming.
Late on Tuesday, Lamont’s office released an outline of what the deal with the Mohegans includes, and issued a statement saying, “This agreement represents months of hard work and dedication to getting a deal that’s best for the residents of Connecticut and moves our state forward when it comes to the future of gaming,” Lamont said.
During the hearing, Lamont’s Chief of Staff Paul Mounds alluded to the announcement. “We are at the precipice of agreement with the tribal nations,” he said.”We are, I will say, closer to an agreement with one than the other.” He went on to use multiple football comparisons, referencing at one point the shocking final play of Super Bowl XLIX: “I’m going to give the ball to Marshawn Lynch instead of trying to throw the ball at this point.”
The latest compact, it will mark a turning point for Connecticut and allow the General Assembly to move forward swiftly, if it so chooses, with legalizing sports betting. According to Lamont’s release, the Mohegans would be able to offer iGaming and sports wagering, which would be taxed as 20% and 13.75%, respectively — which is less than the 25% tribes currently pay the state of gross gaming revenue from slots. The deal would also allow for the Connecticut Lottery to operate 15 retail sports betting locations, including to-be-built locations in Hartford and Bridgeport, as well has an online platform.
“Now that the Governor Lamont has laid bare the confidential terms of our negotiations, you can see the significant and substantial concessions made by both Tribes,” said Rodney Butler, the tribal chairman of the Mashantucket Pequots told the Connecticut Mirror.
The expectation is that Lamont’s office and the Mashantucket Pequots will announce a similar deal in the coming days.
Tribal leader: Lots of compromise
This agreement that we've reached with the Mohegan Tribe represents months of hard work and dedication to getting a deal that's best for the residents of Connecticut and moves our state forward when it comes to the future of gaming.
— Governor Ned Lamont (@GovNedLamont) March 2, 2021
Given the level of enthusiasm and the tone of the governor’s and tribes’ representatives at the hearing, negotiations have been handled with a unique blend of respect and collaboration.
“This is the first time that we have had a focused negotiation with a defined outcome,” said Butler. “There has been significant compromise on the part of the tribes. … I think you’ll all be surprised. This truly will be a defining moment for the state and governor in terms of revenue.
“I’d take Paul’s (Mounds) analogy a step further. … We’re literally on the one-inch line. I’d say we’re at fourth and inches, not first and goal. We are down to one point that we’re not in agreement on. It’s my nation that is not in agreement yet. The Mohegans have their initiatives, and we have ours.”
Butler alluded to the fact that the final point comes down to money, but it’s money that he identified as “something like a rounding error in the state’s budget,” but said “it’s about my nation’s future.” That comment underscores the challenges of tribal gaming — the tribes have a markedly different agenda than government or business. For any tribe, sports betting isn’t just about making a buck, it’s about preserving and continuing to build a way of life.
Lawmakers, who are not privy to the details of the compact negotiations, peppered both the tribal leaders and Lamont’s representatives with questions, seeking a better idea of what to expect. Neither side gave up much — they are bound by a non-disclosure agreement during negotiations — but the fact that both sides directly acknowledged announcements were coming said enough.
Lawmakers ready to act
Lawmakers, specifically those on the Public Safety and Security Committee, should now be able to turn their attention to crafting legislation that would make sports betting and iGaming legal. There are multiple bills circulating, including one from Sen. Cathy Osten, a longtime supporter of the tribal nations. The governor’s budget bill also outlines a broad expansion of gaming.
The committee has had multiple marathon hearings since the Professional and Amateur Sports Protection Act was overturned in 2018, and committee members acknowledged not only their frustration, but their relief at the idea of being able to move forward.
“Our roadblocks have been that everybody wants everything, and no one wants to give up anything,” said Rep. Kurt Vail. “So if you can make that happen, I think the people on the this committee would support that.”
Said Rep. Pat Boyd: “It feels al little bit like Groundhog Day. We’ve had this conversation before, but this time the governor’s office is leading.”
Though there was plenty of reserved enthusiasm from the tribes and the governor’s representatives, not everyone is happy with the idea that the tribes will get exclusivity. Even Vail, who appears poised to back sports betting legislation, said he “should be able to go to [a local bar] and throw money down” on a game.
Among those who testified Tuesday were representatives from the Manchester restaurant Shea’s; Sportech, which runs OTBs around the state; and the Connecticut Lottery. All three were angling for an opportunity. With Lamont’s announcement later in the day, the lottery got its piece of the pie. If Shea’s is a lottery partner, it could potentially get the sportsbook it wants, and according to the release, Sportech could potentially get in on the action. Under the new compact, the lottery could “sub-license some of those locations to the state-licensed pari-mutuel operator.”
Sportech argued for opportunity
Sportech CEO Ted Taylor was clear during the hearing that his company has not been part of the conversation between the state and the tribes. It has had some communication with the governor’s office, but not enough to know if it will be included in expanded gaming. The company is specifically interested in offering sports betting at its OTBs.
“We advocate for a level playing field for each of the state’s four existing gaming partners,” Taylor said prior to the announcement, referring to the two tribes, the lottery, and his own company. “We are hopeful there will be significant cooperation, and we can work together.”
Sportech is a London-based gaming company that Taylor said employs approximately 400 people at its North American headquarters in New Haven.
Lawmakers directed their most serious grilling at the Connecticut Lottery, which after multiple scandals is in the position of having to regain the trust of the legislature and state residents. The chair of the Connecticut Lottery’s board of directors, Rob Simmelkjaer, was clear that the lottery wants to offer sports betting in addition to other kinds of iGaming. As with Sportech, he said the lottery has not been a direct part of discussions between the state and the tribes. Simmelkjaer suggested that the lottery was prepared to offer wagering via kiosks or with live ticket writers at lottery partners, including convenience stores and restaurants and bars, as well as online. It will get a chance to offer wagering at a limited number of locations under the new deal.
“Your question is about retail sports betting in places around the state, but that is part of the negotiations between the state and the tribes, and I don’t really want to get into that,” Simmelkjaer replied to a question about where the lottery would or could offer sports betting. “But we have a strong retail network, and that is a strong asset to us. But what sports betting will look like going forward, we don’t really want to comment on that with negotiations still going forward.
“More is better from our point of view on retail. We think retail is important for people who want to do cash transactions, convenience.”
The state lottery has approximately 2,900 partners across Connecticut, ranging from gas station-convenience stores to full-fledged dining establishments. Simmelkjaer, who owns the media company Persona Media and was an executive at both NBC Sports and ESPN, was tapped by Lamont to become chairman of the lottery’s board last May.
Anti-gambling groups heard
Beyond the key players, the list of witnesses was many and varied. The anti-gambling lobby was vocal, but it focused more on adding funds for problem gaming programs than on trying to stop the legislation. Joe Briggs, a representative from the NFLPA, asked that lawmakers include language in a sports betting bill that protects the personal information and data collected on athletes. Neal Eskin, the executive associate director of athletics at the University of Connecticut, asked that lawmakers ban betting on local college teams and college prop bets.
A Humane Society lobbyist asked that wagering on greyhound betting be prohibited. Also, multiple convenience-store groups asked to be included, and representatives (including lawmakers) from the city of Bridgeport asserted that their city should be able to host gaming.
The only operator that offered live testimony was Penn National Gaming, which doesn’t currently have access into the market, and thus no entry point for its Barstool Sportsbook. The only sports betting operator that has publicly announced an agreement with one of the state’s tribes is DraftKings, which late last year partnered with the Mashantucket Pequot and will operate retail and mobile wagering platforms for the tribe’s Foxwoods Casino.
Details of the deal with the Mohegans have not yet been released, so it’s unclear if any of the other issues that were brought up at the hearing were addressed.
Tuesday’s hearing lasted seven hours, and sports wagering and digital gaming were on the docket with multiple other issues. The committee did not vote on any of the bills.