Online gaming, sports betting could get a shot this legislative session
At a March 15 hearing in Hartford, hours and hours of testimony were devoted to a bill that could lead to another casino in the state. But it's other gambling-related legislation that may have a better chance of passing.
In fact, the bill that’s most likely to fly may be one that calls for the hiring of a consultant to study the impacts of all forms of existing gambling in the state and recommend a strategic plan for possibly authorizing more casinos, sports betting, online gaming and sports fantasy contests.
“That’s really the most logical first step,” Rep. Joe Verrengia, the West Hartford Democrat who co-chairs the Public Safety and Security Committee, said last week in a phone interview. “To me, that one's a no-brainer.”
Verrengia said it’s hard for part-time legislators to master the complexities surrounding legalized gambling and he believes they need to have access to independent experts and their analyses.
In addition to approving the casino-expansion bill — after removing a provision that would have repealed authorization for the East Windsor casino that the Mashantucket Pequot and Mohegan tribes are preparing to build — Verrengia’s committee also forwarded to the House of Representatives the bill calling for a gambling study and one calling for the regulation of sports betting. Connecticut is among a number of states that expects the U.S. Supreme Court to soon lift a federal ban on such wagering.
Testimony regarding the sports-betting bill shows that while the Mashantuckets and the Mohegans, respective owners of Foxwoods Resort Casino and Mohegan Sun, support sports betting, they’re far more bullish about the legalization of online gaming — the playing of slots-like games, table games and poker games on computers and mobile devices.
For years, in anticipation of the state legalizing online gaming, the Connecticut casinos have operated online-gaming websites that don’t involve money. In 2015, Mohegan Sun, which manages Resorts Casino Hotel in Atlantic City, introduced a real-money online site for New Jersey-based gamblers. Foxwoods rolled out an online “social casino” in 2013.
It's a good time for Connecticut to get onboard, Seth Young, Foxwoods’ executive director of online gaming, said in a phone interview. “The state has a budget deficit and we’re looking at black market activity (signaling demand). Online gaming can drive some much-needed revenue.”
More revenue, he said, than sports betting can generate.
Testifying before the public safety committee, Young said the tribes — the Mashantuckets and the Mohegans collaborated on projections — believe online gaming, or iGaming, could provide the state with about $87 million in tax revenue in the first five years, starting with $14.25 million the first year and growing to $20 million in the fifth year.
Sports betting, the tribes estimate, would generate $40 million in tax revenue over the course of five years, growing from $6.5 million the first year to $9.1 million the fifth year.
“This is a far cry from the $40 million to $80 million in tax revenue per year that you’re being sold” by sports-betting advocates, Young told the committee. “Even in our most ambitious projections, we do not reach a scenario where the $40 million to $80 million per year in tax revenue seem possible or plausible.”
In New Jersey, where online gaming was introduced in 2013, the activity has generated more than $126 million in new tax revenue, according to Young.
The tribes further project that their combined online-gaming and sports-betting operations would enable Connecticut to collect an additional $127.7 million in tax revenue over five years, growing from $20.8 million the first year to $29 million the fifth year.
“We are comfortable standing behind these projections, and are comfortable stating that you can book this revenue into the budget for the 2018-2019 fiscal year if we are legally authorized to get both programs up and running,” Young testified.
In written testimony, Avi Alroy, Mohegan Sun’s vice president of interactive gaming, told the public safety committee that the regulation of sports betting and online gaming would enable the casinos “to more easily identify individuals that ... show signs of a gambling issue."
“Technology allows us to flag players with certain behaviors, allows players to self-exclude, and can easily identify underage players and deny their ability to play,” Alroy wrote.
While the tribes believe their gaming agreements, or compacts, with the state grant them the exclusive right to offer sports betting in the state, both the Connecticut Lottery Corp. and Sportech Venues, which operates more than a dozen off-track-betting locations, are angling for a piece of the would-be action.
“Our locations, PLUS the existing casinos are uniquely positioned to seamlessly deliver this expansion so that Connecticut residents can enjoy a sports bet legally and the state benefits from incremental tax receipts,” Ted Taylor, the Sportech Venues president, said in written testimony. “... Sportech and the existing casinos are the only logical way to evolve and deliver sports betting by using state-of-the art digital platforms, allied to existing bricks and mortar operations ...”
The Connecticut Lottery Corp. believes the variety of people interested in wagering on sports could allow for the lottery, which operates more than 2,900 retail locations, to join the fray along with Sportech and the casinos.
“There is enough variety and locations that sports betting need not be limited to just one entity,” Steve Wagner, the lottery’s director of information technology, testified.
A potential by-product of the state’s legalization of betting on college sports, should that become a possibility, is the effect it could have on the state’s hosting National Collegiate Athletic Association events. The NCAA, which prohibits student-athletes and staff members of an institution’s athletics department from participating in any sports wagering, also bans NCAA championship events from being held in states where legal wagering is allowed on the outcome of a single event in a sport in which the NCAA conducts a championship.
Neal Eskin, senior associate athletic director at the University of Connecticut, testified that legalizing betting on certain NCAA sports could jeopardize events scheduled to be held in the state. These include first- and second-rounds games of the 2019 men’s basketball championship as well as scheduled championship events in men’s lacrosse, women’s ice hockey and men’s golf.