Lamont bet on getting the deal he wanted, and won
In 2018 the U.S. Supreme Court ruled unconstitutional a federal prohibition against sports betting in much of the country. This provided a potential new revenue stream for two of the region’s largest business enterprises, the tribal-run Foxwoods Resort and Mohegan Sun casinos, at a time when both were facing increasing competition in neighboring states.
But as other states moved ahead with sports betting — New Jersey and Rhode Island among them — Gov. Ned Lamont’s administration struggled to find the right negotiating path to authorizing the activity here in Connecticut. It was a process complicated by the compact between the two tribes and the state that outlines the rules for the legal gambling they provide on their reservations.
The tribes contended that sports betting was a casino game and, if legalized, they had exclusive rights to provide it. The administration took the opposing view.
As a couple of years passed without a deal, criticism of the administration’s inability to find a way to “yes” grew, including in our editorials. But we have to give Gov. Lamont his due. Though it took a while, he got the arrangement he wanted and avoided the pitfalls he had expressed concern about.
On Oct. 7, online sports betting is set to begin in Connecticut. And any day now, Mohegan Sun and Foxwoods are expected to unveil casino games accessible on your smartphone, tablet, laptop or desktop computer.
Lamont wanted the Connecticut Lottery Corp. to get a piece of the action. Under the agreement reached among the parties, and made official through legislation, the Lottery is partnering with Rush Street Interactive to run an online sportsbook.
Lamont also sought to avoid lawsuits that could delay and complicate the introduction of online sports betting and casino gaming. One potential litigant was Sportstech, which runs off-track-betting sites in the state and had expressed concern about being cut out of legalized gambling expansion. But the Lottery reached a deal with Sportstech to operate up to 15 retail gambling venues. It opens with 10 at its existing locations.
Another litigation landmine could have come by way of the MGM Springfield casino. MGM threatened to challenge on constitutional grounds the decision by Connecticut to award the Mashantucket Pequot and Mohegan tribes the right to jointly open a third state casino in East Windsor 12 miles away, without opening the selection process to competition. At the time the online gambling deal was sealed, the two tribes announced they were shelving plans for that third casino.
In the end, the tribes made the calculation that they had much to gain from being able to go ahead with their plans for online gaming and sports betting, as well hosting sports-betting parlors at their casinos, and that it was too risky to launch an uncertain legal fight for exclusive control of these enterprises.
Revenue for the state will come from a 13.75% tax on sports wagering and from $170 million in payments from Rush Street and Sportstech over the life of their 10-year contracts. The tribes have agreed to pay an 18% tax for the first five years of their new online casino gaming, 20% thereafter.
The two tribal casinos will also continue to share 25% of their in-casino slot revenues with the state.
An analysis done for the state projects that online casino gaming will bring in $330 million in annual revenues, online sports betting $88 million per year. That would amount to just under 2% of the state budget, but any projections now are highly speculative.
A serious concern about the increased access to betting is that it will lead to more problem and addicted gamblers, which of course it will. Under the bill several million dollars will be directed to public service efforts to discourage excessive gambling and to nonprofits that deal with the issue, such as the Connecticut Council on Problem Gambling.
The legislature must be prepared to adjust safeguards and install limits based on the evidence produced once these systems are up and running.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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