As the push for legalized sports betting continues, Connecticut is one of the states jockeying for favorable position in the race to eventually allow it. The state is currently working on legislation in the form of a bill that will legalize sports betting both at casinos and online if the Supreme Court moves to strike down PASPA.
Two Native American tribes, the Mashantucket Pequot and Mohegan, control and operate the state of Connecticut's gambling, and the tribe that operates the incredibly popular Foxwoods Resort Casino testified in favor of both sports betting and online gambling last week while discussing the potential expansion in the US.
Foxwoods’ Executive Director of Online Gaming Seth Young delivered a testimony to the Public Safety and Security Committee in order to declare the Mashantucket Pequot Tribal Nation’s “support for legal sports gambling – both on-reservation and online – and more broadly for regulated online gambling.”
“For 26 years, Foxwoods has been a brand that consumers know that they can trust for a fair game and a great experience. This state needs trusted partners to stand behind a strong program in order to restore the trust in iGaming and protect its constituents from dishonest operators.”
Young didn’t shy away from releasing the tribe’s thoughts on the one percent integrity fee proposed by Major League Baseball and the National Basketball association. The fee, which would be levied on all bets placed under the leagues’ released Model Wagering Act, has been accepted by some states but detested by others and the tribe certainly falls into the category of those critical towards it:
“This proposed royalty fee, which equates to 20% of the revenue derived from a sports gambling operator, goes directly against the interest of good public policy and social responsibility in any state considering sports gambling legislation. The leagues’ position is somehow premised on the illogical assumption that it will cost more to ensure the integrity of a fully transparent regulated market than it does to ensure that level of integrity in the black market they’re currently facing; that’s simply absurd.”
Legislators expect somewhere around $2 billion in sports bets annually with a tax return of $40 million to $80 million pending on whether bets themselves, gambling revenue or winnings are taxed which has yet to be determined. Young released the tribe’s own calculations and projections and whether they line up with law makers will be an interesting development to follow:
“We estimate that the entire sports gambling market opportunity in Connecticut is worth between $75M to $105M per year, split between all operators, before any operating costs or taxes are contemplated. Based on our market estimates coupled with a pragmatic tax rate, we estimate Connecticut can collect $6.5M in tax revenue after Year One of operation, escalating to $9.1M by Year Five of operation, for a total of $40M in new tax revenue over the course of five years.”
State Attorney General George Jepsen has taken a cautious approach towards proceedings and has warned legislators that the Mashantucket Pequot and Mohegan tribes could argue that sports betting violates their gambling agreement with the state, a major concern for those aware of the strict legislation between the two groups.
Under that current agreement the tribes have exclusive rights to offer gaming in the state and return 25 percent of their revenue to the state in the form of a tax in exchange for that right. It would be expected for the tribes to want exclusive rights to sports betting operations, but it can still be decided whether or not wagering would be pursued as a strictly tribal enterprise or as a joint commercial venture which could establish brick-and-mortar sports betting on non-tribal land.
Young made clear, though, that online gambling and online sports betting could go hand in hand in helping expand the reach of the tribe. The Mohegan Tribe which operates the Mohegan Sun in Connecticut already runs an online casino in New Jersey leading one to believe their support for online ventures can also be anticipated.
“While I am not a lawyer for Foxwoods or the Tribe I will also state for the record that I know the tribes believe sports gambling, daily fantasy sports betting, and iGaming fall under the exclusivity agreement.”
Connecticut Lottery Corp. director Steve Wagner is bullish on the developments as he believes sports betting would be a major benefit to the state in terms of generating taxes much like lottery games currently are. Wagner said last week that 100 percent of the sports betting industry’s proceed would be returned to the state keeping in line with “all other lottery games.”
“Our sports betting product, like all Connecticut Lottery games, would be regulated in a safe and secure environment utilizing responsible gambling best practices, and would provide a convenient option that all players across Connecticut can enjoy.”