Connecticut seen as prime candidate for legalizing sports betting

Connecticut bettors could be placing legal wagers on NFL games by the end of next year, with the state's cut eventually amounting to tens of millions of dollars annually.

Sports betting, an illegal black market estimated at from $60 billion to $150 billion, is about to step out of the shadows, its fate resting with the U.S. Supreme Court and New Jersey's challenge of a federal ban affecting all but Nevada and three other states. If the high court strikes down the law, the Professional and Amateur Sports Protection Act of 1992, dozens of additional states could legalize sports betting, according to gaming-industry analysts.

Aside from New Jersey, some say, there may be no state in a better position than Connecticut to take advantage of PASPA's potential demise.

"In Connecticut, relative to other states, you've already got an infrastructure in place in Foxwoods and Mohegan Sun (casinos), you've got financial need and the current legal momentum," said Chris Grove, managing director of Las Vegas-based Eilers & Krejcik Gaming. "You're unlikely to have a lot of disagreement among the stakeholders."

On June 7, as its regular session neared an end, the Connecticut legislature passed a gaming-expansion bill requiring the commissioner of consumer protection to adopt sports betting regulations "to the extent permitted by state and federal law." Only three weeks later, the Supreme Court announced it would take up New Jersey's appeal of lower court rulings. The high court is scheduled to hear oral arguments Dec. 4 and is expected to render a decision early next year.

Connecticut's federally recognized Indian tribes, the Mashantucket Pequots and the Mohegans, respective owners of the casinos, anticipate a ruling in New Jersey's favor.

"It does seem like the stars are aligning," Rodney Butler, the Mashantuckets' tribal chairman, said Friday. "When you have the AGA (American Gaming Association), the NIGA (National Indian Gaming Association), the states lining up, major sports leagues and now an administration in place with a gaming background and a Supreme Court that seems to be in agreement with him ..."

It may not be a question of if or even when, but how soon. How soon can states like Connecticut start sanctioning — and taxing — sports wagering?

"We've got a good regulatory environment in place and we're a known entity. We're well-postured to do this,'' Mohegan Chairman Kevin Brown said. "I don't think 2018's a stretch."

Provided the federal ban is lifted and depending on whether Congress then decides on a national approach, the state would have to pass legislation legalizing sports betting, which, Brown suggested, it could do during next year's regular session. Among the details that would have to be worked out is whether the Mashantuckets and the Mohegans would offer sports betting exclusively at their casinos or if it would be available at other locations and on other platforms, as well.

"That's up to the state of Connecticut to figure out," Brown said. "Our position is that exclusivity would come into play, but the state might want to go another way. We just want to be part of it."

Estimates of the potential windfall vary.

Labeling sports betting “a sleeping giant,” GamblingCompliance, a global research firm, projects that within five to seven years of a PASPA repeal, a legal U.S. sports wagering market would be worth between $2 billion and $5.8 billion in annual gross revenue. By 2025, the firm estimates, the market would span between 21 and 37 states.

In its report, Eilers & Krejcik estimates that a 50-state market for regulated sports betting would be worth from $7.1 billion to $15.8 billion in revenue “and could, in a bullish scenario, attract up to 44 million customers wagering some $245 billion annually.” It predicts 32 states will authorize sports betting within five years of a PASPA repeal.

Brown said preliminary estimates of the state’s share of the sports-betting market — based on a 15 percent tax on the revenue — could generate from $20 million to $25 million annually. Given the size of the potential market, he said there'd be no point in racing New Jersey to be the first in the Northeast to offer legal sports betting.

“There would be little, if any, first-mover advantage,” Brown said. “There will be plenty left for the second-mover.”

In terms of public attitudes, too, the time for the legalization of sports betting might be right.

The Washington Post reported late last month that a poll it conducted with UMass Lowell found that 55 percent of the population approve of legalized sports betting. Legality aside, 21 percent of sports fans indicated they’ve bet on professional sporting events in the past five years.

An earlier poll commissioned by the AGA, the national trade group for the commercial and tribal casino industry, determined that nearly six in 10 Americans, and 72 percent of those identifying as avid sports fans, favor an end to the federal ban on sports betting.

In the New Jersey cases consolidated before the Supreme Court, the AGA filed a brief in support of the petitioners, Gov. Chris Christie and the New Jersey Thoroughbred Horsemen’s Association. The respondents in the cases include the National Collegiate Athletic Association and the four major professional sports leagues: the National Football League, National Basketball Association, National Hockey League and Major League Baseball.

The leagues’ once-fervent opposition to regulated sports betting has waned considerably. An NHL expansion team now calls Las Vegas home and the Oakland Raiders' move there has been approved.

In its brief, the AGA claims the federal ban on sports betting has failed.

“Far from stopping sports betting,” it asserts, “PASPA has just moved it into the shadows, all while Americans’ views on the matter have evolved.”

b.hallenbeck@theday.com

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