Lamont, tribes reach gaming agreement; sports wagering, online betting on tap
Connecticut residents could be placing legal bets on preseason NFL games this summer.
That heady prospect took hold Thursday with Gov. Ned Lamont and the chairmen of the Mashantucket Pequot and Mohegan tribes announcing they’d reached an agreement that would allow the tribes and the Connecticut Lottery Corp. to provide sports wagering and online gaming.
Before it can happen, the state legislature and then the U.S. Department of the Interior, which regulates gaming on tribal lands, would have to approve the deal, a process that could be completed by August or September, Rodney Butler, the Mashantucket chairman, said hours after the announcement.
“I’m thinking months,” he said of the approval process. “We could be launching mid-, end of summer.”
The announcement, which had been expected for days, came two weeks after the Lamont administration announced it had a deal with the Mohegans but not the Mashantuckets. Butler said at the time a lone “sticking point” was preventing his tribe from signing off on the agreement. The bone of contention was the tax rate the state would charge on the tribes’ online gaming revenue — the state and the Mohegans had agreed to 20% while the Mashantuckets wanted 18%.
Butler said the difference in the rates was worth “a couple of million dollars” annually to his tribe, which has a budget in the “tens of millions” compared to the state, which has a budget in the “tens of billions.”
The final, 10-year agreement calls for an 18% tax rate for the first five years, followed by 20% for the next five years. The agreement can be extended for an additional five years.
The tribes, respective owners of Foxwoods Resort Casino and Mohegan Sun, would pay a 13.75% tax on their sports wagering revenue.
“I think it’s going to do very well in the legislature,” Lamont said of the deal during a virtual news briefing later in the day. “The legislature had some other bills on there that would not have advantaged the state of Connecticut nearly as much, and I think people are sort of happy with the way this has come out. I’m really happy that Rodney and James (Gessner Jr., the Mohegan chairman) are on board and together.”
Lamont said other aspects of the tribes' existing gaming agreements, including the requirement that they contribute 25% of their casinos' slot-machine revenues to the state, were not on the table during negotiations.
In reaching the deal, the tribes backed off their insistence that they be granted the exclusive right to operate sports wagering and online gaming in the state, and agreed to put on hold for at least 10 years their plan to jointly develop a “satellite” casino in the northcentral Connecticut town of East Windsor.
While Butler acknowledged the tribes’ exclusivity claim had been the biggest obstacle to an agreement, the governor’s demand that the tribes abandon the East Windsor project was “for me, the most sensitive part of the deal.” He said Lamont’s team pushed for repeal of the 2017 law — signed by Lamont’s predecessor — that authorized the East Windsor casino.
The tribes had jointly pursued the project as a way of protecting their resort casinos in southeastern Connecticut from the competitive impact of MGM Springfield, a $1 billion resort casino that opened across the Connecticut border in Massachusetts.
Butler, who took questions during his own virtual news conference, said he still believes the project is viable and can be revived in 10 years. He said the tribes have invested about $20 million in the project.
Under the deal announced Thursday, the quasi-public Connecticut Lottery would have the right to operate 15 retail sports betting locations, including new venues in Hartford and Bridgeport, and could sublicense locations to Sportech Venues, the state’s off-track betting operator.
The lottery also would be authorized to sell tickets to its draw games online and provide online keno.
“We’re pleased that the agreement would allow the Connecticut Lottery to modernize our business through online sales of some existing lottery games, and to grow our contribution to the state by introducing both online and retail sports betting,” lottery officials said in a statement. “The CLC has already contributed nearly $300 million to the General Fund through the end of last week, and we are poised to continue delivering responsibly for the state through these additional revenue streams.”
Sportech Venues, which has threatened a lawsuit over being left out of any direct involvement in the deal, also issued a statement Thursday.
“Sportech supports expanded gaming in the State; however Federal and State law mandates a level playing field,” the company said. “Today’s announcement does not appear to offer that level playing field; Connecticut consumers will be deprived of a healthy competitive betting marketplace and the Connecticut jobs that Sportech supports will be at risk."
“We continue our dialogue with the Administration in pursuing gaming expansion that does not contravene laws and discriminate against not only our employees, but all Connecticut consumers,” Sportech said.
Some Mohegan Sun patrons standing outside the Uncasville casino Thursday reacted positively to word of the gaming agreement.
“That’s great,” said Jim Cormier, a 63-year-old Las Vegas resident who grew up in Norwich, played football at Norwich Free Academy and has been back home visiting his mother. “I’m from Las Vegas, I live in the sports books. I bet on my Patriots and the Bruins. I’m single and go anywhere I want.”
“You can take the man out of Las Vegas but you can’t take Las Vegas out of the man,” he said.
M.J. Doron, 28, and Nelson Santini, 26, both of New Haven, also celebrated word that sports betting and online gaming could be on the near horizon in Connecticut.
“With COVID, you can just place your bets at home. I’m definitely for it,” Doron said.
“That’s dope,” Santini added.
According to Lamont’s office, the agreement will generate tens of millions of dollars annually in new revenue for the state. The windfall is expected to exceed the $47.3 million in new gaming revenue the governor included in his proposed budget for the 2022-23 fiscal year.
“The Mohegan Tribe is very thankful to our partners in government, both the Mashantucket Pequot Tribal Nation and the State of Connecticut, for reaching collective agreement on a path forward for modernizing our state’s gaming entertainment industry,” said Gessner, the Mohegan chairman. “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.”
Members of southeastern Connecticut’s legislative delegation, including Sen. Cathy Osten, the Sprague Democrat whose district encompasses both tribes’ reservations and casinos, hailed the agreement.
"I'm pleased that the Mashantucket Pequot and Mohegan Tribal Nations have finally negotiated the terms of a fair and beneficial sports betting and iGaming agreement with the State of Connecticut,” Osten said in a statement. “I also want to thank the Lamont administration for its commitment to finalize this agreement to the satisfaction of all parties involved. It is my sincere hope that today's agreement signals the beginning of a new approach by the state of Connecticut to working with and valuing two of our largest, minority-owned businesses who employ thousands of state residents, who contribute billions to our economy, who have a world-wide reputation, and who have been steadfast economic partners with Connecticut for almost 30 years."
“As the ranking member on the Finance Committee, I welcome the announcement of today's agreement between the state, the Mashantucket Pequot and the Mohegan Tribes,” Rep. Holly Cheeseman, R-East Lyme, said. “The tax revenue generated from this agreement stands to benefit the region and the entire state of Connecticut.”