Legislation Filed To Allow Online Casinos And Sports Betting In Connecticut

Sen. Cathy Osten filed the tribal gaming bill to legalize sports betting and online gambling in Connecticut this week. Most of the language comes from bills she introduced in previous years, but she believes the result will be different.

This time, Osten expects her bill to be taken seriously. In fact, she expects it to be the only gaming expansion bill considered in Connecticut in 2021.

“I think it’s important for us to get this done,” Osten told Play MA. “It should have been done two years ago. It certainly has stabilized the gaming industry in other parts of the country. I’m hoping the governor is interested in living up to the compact with two tribal nations and actually forwarding and modernizing gaming in the state of Connecticut. It just makes sense.”

In past years, her bill was considered the tribal ask while lawmakers led by Rep. Joe Verrengia worked on an option that appeased all interested parties. However, Verrengia termed out and Gov. Ned Lamont spoke of wanting to work out a deal to give sports betting and internet gaming to the tribes.

With the governor negotiating with the tribes, it makes sense that the tribal bill be the legislative vehicle.

Details of Connecticut gaming expansion bill

Osten’s legislation, numbered S 146, grants the Mashantucket Pequot and Mohegan tribes exclusivity to offer sports betting and online casino gaming in Connecticut.

Details of the 38-page bill include:

• Tribes pay 8% of gross gaming revenue on sports wagering and 10% from online casinos to the state. Earmarks 10% of the state revenue from sports wagering to the statewide tourism marketing account.
• Each tribe may use one skin each for online sports wagering and online casino.
• Authorizes retail sports wagering at the Mohegan Sun and Foxwoods casinos. A possible future casino in East Windsor could also eventually get sports betting.
• Provides an effective date of July 1 and order that the governor enters into amendments to the Mashantucket Pequot procedures and memorandum of understanding, and the Mohegan compact and MOU no later than Oct. 1.
• No later than Oct. 1, the Commissioner of Consumer Protection must adopt regulations addressing the operation of, participation in, and advertisement of sports wagering and online casino gaming. But the tribes may operate sports wagering and online casino in accordance with tribal gaming agency standards prior to final regulations.
• Allows the Connecticut Lottery Corporation to sell tickets for lottery draw games through its website, online service, or mobile app. The total number of drawings shall not exceed 24 in a day.
• Permits the lottery to offer keno online, with the state paying 12.5% of gross operating revenue from keno to the tribes.

Fiscal analysis of the bill projects $853 million in internet gaming revenue over a five-year period, providing $85 million to the state. Sports betting would bring an additional $545 million online and $136 million retail, putting $55 million in state coffers. Total, that’s an average of $28 million annually for Connecticut.

Here is the full bill:

Differences from past tribal gaming bill

The bill essentially is the same as the one Osten introduced last year.

The main difference is it doesn’t include the construction of a casino in Bridgeport or entertainment zones that can offer retail sports betting across the state.

Osten explained that, because of the pandemic, cash flow for the tribal nations wasn’t conducive to starting a slew of new projects.

In last year’s bill, the tribes pledged to build a commercial casino in Bridgeport. They hoped to gain support from lawmakers in and around the state’s biggest city.

Although the bill has an additional 16 co-sponsors, all of them are from the eastern delegation that traditionally supports tribal interests. Osten said that COVID-19 made it harder to get others to sign on.

Momentum building for legalizing CT sports betting

In past years, Lamont has opposed internet casino and argued against the tribal claim of exclusivity over sports betting.

Last month, Lamont let it be known that he wanted to make a deal with the tribes and that he no longer opposed iGaming.

The CT Mirror added that the governor’s commissioner of economic development, David Lehman, would lead the negotiations along with chief of staff Paul Mounds, secretary of policy and management Melissa McCaw and general counsel Bob Clark.

Osten said tribal representatives were meeting with staff from the governor’s office today for the third or fourth time in the past few weeks.

“There are discussions going on,” Osten said. “I don’t know how fruitful those discussions are. I’m hoping the governor will be willing to actually negotiate and we can get this in.”

The Mashantucket Pequot seems to think the gaming expansion is coming this year. Last month, the tribe signed a market access deal with DraftKings Massachusetts to operate online casino and sports betting. Mohegan has a deal with Kambi for sports betting.

What about Off-track betting parlors?

Osten’s bill has no mention of Connecticut’s other gaming properties, off-track betting parlors run by Sportech offering pari-mutuel wagering.

“I think they can be a vendor in this if they want to work with the tribal nations,” Osten said. “I would point out that in the whole year last year, OTBs brought a total of $3 million to the state. The tribes bring in 10 times that amount in one month.”

In the early 90s, Connecticut gave the tribes the exclusive rights to casino games in return for 25% of slots revenue. The tribes have paid the state nearly $9 billion over the course of the arrangement.

At issue in this argument is whether sports betting counts as a casino game. In last year’s committee hearing, Sportech indicated that it would sue the state if excluded from sports betting.

“I’m getting quite tired of hearing everyone say they’re going to sue the state of Connecticut to stop gaming from moving forward,” Osten said. “The compact is very clear. Internet gaming is a casino game across the country. The courts ruled that sports betting is a casino game. That fits into the compact, a compact that honors a relationship of thousands of years between the tribes and the state of Connecticut.”

Path forward for Connecticut tribal gaming bill

Osten expects the gaming expansion bill to get a hearing in the Joint Public Safety Committee and Security Committee either next week on Thursday or the following week.

The committee is co-chaired by Rep. Maria Horn and Sen. Dennis Bradley. Bradley supported Osten’s legislation last year. Osten is vice-chair on the committee.

She wants to begin moving the bill forward independent of the governor.

“If there is an agreement [between the tribes and governor] before the bill is voted on, the bill will be amended,” Osten said. “If not, we’ll work to pass the bill. Part of the bill is that the governor needs to finalize the compact discussions.”