Report: Connecticut a good bet to approve sports wagering this year

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Connecticut is one of the six states most likely to pass sports betting legislation this year, according to a report published Thursday by an independent research firm.

But it’s not going to be easy, James Kilsby, an editor with GamblingCompliance, the Washington, D.C.-based firm, wrote in an email.

“It is one state where we are provisionally expecting a bill to be passed this year, but it is by absolutely no means a slam dunk,” Kilsby wrote. “In fact, Connecticut is a microcosm of the legal and lobbying complexities facing sports betting legislation across the country.”

In its report, “2019 U.S. Sports Betting Outlook,” the firm says as many as 33 states are expected to consider bills regulating sports wagering during their 2019 legislative sessions. After a U.S. Supreme Court decision in May cleared the way for such legislation, six states have introduced sports wagering, which has been legal in Nevada since the 1940s.

The biggest challenge to Connecticut’s adoption of sports betting, Kilsby said, is the Mashantucket Pequot and Mohegan tribes’ claim that their gaming agreements with the state grant them the exclusive right to provide sports betting. He said it’s unclear whether federal law governing tribal gaming allows tribes to operate online sports betting beyond their reservations.

In Connecticut, Sportech Venues, which operates off-track betting in the state, and the Connecticut Lottery Corp. also want to provide sports betting. MGM Resorts International also is interested, and other casino operators likely are, too.

The major professional sports leagues also are expected to return to the Connecticut legislature this year to renew their pitch for a piece of the action.

Kilsby said approval of sports betting in the state could run aground if it gets caught up in controversy over other gaming-related issues, which include potential casino expansion and the authorization of online gambling. State Rep. Joe Verrengia, D-West Hartford, co-chairman of the Connecticut legislature's Public Safety and Security Committee, which deals with gaming, has said he favors a comprehensive approach.

“I’m not a proponent of a standalone sports betting bill,” Verrengia said this week. “It needs to be part of an overall gaming policy.”

While the state’s interest in approving sports betting has to do with the tax revenue it can generate, some experts caution against too-high expectations.

“Bottom line is this is no great boon for state revenue,” Richard Auxier, a researcher with the Urban-Brookings Tax Policy Center, wrote Thursday in a blog. “Sports gambling will bring in a few extra dollars to the state but it won’t fund large amounts of education or infrastructure. If states want to play, that’s fine, but they shouldn’t bet their budget on it.”

States typically tax the sports betting revenue a casino, or operator, keeps after paying winning bettors. Nevada, which imposes a 6.75 percent tax rate on sports betting revenue, collected about $20 million in the last 12 months, Auxier reported, while New Jersey, which taxes casino sports betting revenue at 8.5 percent and online sports betting revenue at 13 percent, took in about $8 million in its first six months, most of it from online betting.

Rhode Island, Delaware and Pennsylvania have the highest sports betting tax rates of 51, 50 and 36 percent, respectively, according to the tax policy center. Rhode Island introduced sports betting late last year at the Twin River casinos in Lincoln and Tiverton.

The other U.S. jurisdictions offering legal sports betting are Mississippi and West Virginia. In addition, a tribal casino in New Mexico is taking sports bets, though the state has not authorized sports betting. The District of Columbia approved sports betting in December and will implement it in the spring.

In addition to Connecticut, the states GamblingCompliance believes are most likely to approve sports betting this year are Arkansas, Indiana, Kentucky, Michigan and New York.

Although Congress has considered federal regulation of sports betting, "We see low likelihood of a new federal law being approved ... in 2019," GamblingCompliance says in its report.

b.hallenbeck@theday.com

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