On March 4, 2020, in Madison, Wisconsin’s Kohl Center, a near capacity crowd watched the University of Wisconsin men’s basketball team’s last home game against Northwestern. As the final seconds ticked off the clock, walk-on Junior Michael Ballard made a layup to put Wisconsin up fifteen points. It was only Ballard’s third and fourth points of the season, so scoring in front of a near capacity home crowd would be a lifetime memory. For thousands of sport bettors, however, his shot was worth a great deal more than a story to tell the grandkids.
That layup pushed the Badgers’ lead from thirteen to fifteen points, covering the thirteen-point spread many sportsbooks had put on the game. Rather than returning the gambled money due to a push (gambling lingo for a tie), sportsbooks and illegal bookies kept the money of those with “Northwestern +13” slips and paid out those with “Wisconsin -13”.
In twenty-one states, people can legally feel the pain or reap the rewards of gambling on sports. Connecticut is not one of them, but the state has a long gambling history, and may soon have the right to bet on Wisconsin basketball, or any sport.
On Tuesday, March 3, state representatives, representatives from the Mohegan and Mashantucket Pequot tribes, and other parties interested in making sports gambling possible in Connecticut met to decide this future. Some sat around the roomy wooden table in hearing room 1D of Hartford’s Legislative Office Building, while others crammed into tiny, poorly cushioned chairs to the side. Seated at the round table was State Rep. Kurt Vail (R-52nd District), who said with a stroke of his graying beard, “I feel like we’re on the ten-yard line. We’re in the red zone . . . but there’s like fifteen defensive players on the field, so we’re having a hard time getting in.”
After the United States Supreme Court overturned the 1992 Professional and Amateur Sports Protection Act, which banned gambling on sports, many states rushed to pass legislation to legalize and regulate sports betting. This 2018 decision seemed to put Connecticut at an advantage, with off-track betting on horse racing and two of the nation’s largest tribal casinos already in the state, but almost two years later, multiple bills sit on the Connecticut General Assembly’s floor with no end in sight.
The main reasons for the lack of progress in the General Assembly are the compacts and Memorandums of Understanding the state made with the Mohegan and Mashantucket Pequot tribes. These nearly thirty-year-old documents give the two tribes the exclusive right to casino gambling in the state, which includes things like slots, table games, and bingo, in return for 25% of the revenue they make on slot machines going to state coffers. This brings about an important but complicated question: does sports gambling fall under the category of casino gambling? The tribes, of course, believe it does, therefore giving them the exclusive rights to sports gambling in the state. But even representatives for the tribes understand that it is not totally cut and dry.
Ray Pineault, regional president for Mohegan Gaming and Entertainment, said via e-mail, ‘“Casino games’ is a broad term and not specifically defined in the compacts, but at the time the compacts were negotiated, only casinos could offer sports wagering.” Today, sports gambling is far from exclusive to casinos. The New York Times estimated up to $150 billion was wagered on sports yearly before legalization, and states with legalized sports betting also offer online gambling, usually through mobile apps. In New Jersey, for example, approximately 80% of bets on sports are placed online. Even though these bets are not placed in a brick and mortar casino or sportsbook, the tribes believe they still fall under the category of casino games.
Inside hearing room 1D, Pineault was flanked by Rodney Butler, Chairman of the Mashantucket Pequot Tribal Nation, who wore a piece of traditional Native American jewelry around his neck over his black suit and tie. They were joined at the wooden table by Jared Baumgart, an attorney for the Mashantuckets, and George Henningsen, Chairman of the Mashantucket Pequot Tribal Nation Gaming Commission. A red light lit up on Henningsen’s microphone as he explained why Pineault’s belief that what was intended “at the time the compacts were negotiated” was important, saying, “[D]istrict court . . . would want to know what the intent of the parties was as of April `94 and not all the things that have happened since then. Not what the current status is in 2020, but what did the parties intend then?”
Pineault wrote, “Whether online or at brick and mortar facilities, sports wager[ing] is a casino game, in our opinion, and should be exclusive to the two tribes who have been partners with the state for over two decades.”
The partnership between the state and two tribes was a topic pushed heavily by State Senator Cathy Osten (D-19th District), who represents the district surrounding the tribal lands owned by the Mohegans and the Mashantucket Pequots. Besides drawing attention to the charity work done both by individual members of the tribes and the tribes as a whole, and the fact that the tribes are both top ten employers in the state, she made sure her fellow representatives understood just how much money the state has received from its 25% of slot revenue since the compacts were approved: almost $9 billion. While the amount fluctuates year to year, this past year, approximately $250 million was paid to the state of Connecticut by the two tribes.
The tribes are of the opinion that if they are not given exclusivity in sports gambling in the state, the compacts would be broken, and they would no longer have to pay millions a year in slot revenue. The question for lawmakers is clear: would it be worth it for the state to risk potentially breaking these compacts? This money, combined with Osten’s points about the tribes’ charity work and employment in the state, indicates that it would be in the state’s best interest to keep the tribes happy. To do this, the Connecticut General Assembly would have to pass SB-21, which would give the two tribes exclusive rights to sports gambling.
This seems like it should be pretty straightforward, but sports betting is not the only issue raised in the bill. The biggest issue with SB-21 is the introduction of a new casino in Bridgeport. The goal is to inject some life into Connecticut’s largest city, but with construction on an approved joint-owned tribal casino in East Windsor stalling, it seems like a tall order. The East Windsor casino was proposed as a countermove to the MGM Springfield casino, but since the MGM casino has failed to meet expectations, some wonder whether the East Windsor casino is still necessary. This, combined with zoning issues, prompted the office of the governor to recommend to Butler that the tribes abandon the project, according to Butler’s testimony.
Legislators are concerned that the tribes could see the proposed Bridgeport casino as superfluous as well, causing them to abandon it, too. This concern has likely increased in recent weeks, with the spread of COVID-19 and the downward turn of the country’s economy. One concern brought up during testimony was the use of permissive language (“may”) rather than compulsory language (“will”) in the bill, potentially allowing the tribes to back out. Baumgart, an attorney for the Mashantuckets, says that this is necessary, as he does not “know that the state can actually force a third party to go out and proactively do something, build something, develop something like this.” While this may be the case, it does little to assuage the doubts of those who think approving, planning, and funding a casino that is not built could be catastrophic for a city that is already a punchline to many in the area.
So what are the other options? One could potentially be a new bill that gives the tribes exclusivity, with issues like a new casino to be resolved in another bill. The problem, Pineault argues, is “a standalone sports wagering bill is something that would have to be discussed and negotiated between the tribes and state legislature.” There is still no end in sight to the deliberations two years after the Supreme Court overturned the ban on sports betting; this would extend the process even longer.
“Connecticut would stand to lose approximately $250 million in exchange for ten, fifteen, [or] twenty-five million.
Another option is a different bill on the floor of the Connecticut General Assembly. This bill, known as HB-5168, exclusively addresses sports betting. Its problem is that it does not grant exclusivity to the tribal nations; rather, it allows the Connecticut Lottery and the state’s existing off-track betting operations to apply for licenses in addition to the tribes. This would mean that, in the eyes of the tribes, the state of Connecticut would break the compacts and, therefore, would not be entitled to 25% of slot revenue. As Butler put it in his testimony with an emphatic wave of his hand, “Connecticut would stand to lose approximately $250 million in exchange for ten, fifteen, [or] twenty-five million.”
While this would be a disaster for the state, there could be benefits. Some familiar with the legislation believe that by allowing for competition, other options open up for licensees, such as the ability to give other companies something known as skins. What this means is that non-licensed companies would be able to use an existing license, with permission of the licensee, and make their own types of bets and betting platforms, giving a percentage of revenue back to the licensee. This is where international companies like MGM, DraftKings, and Fanduel could come into play. If the Connecticut Lottery decides that Fanduel has mastered mobile sports betting, they could give them a skin, securing part of their profit while avoiding the hassle of making their own digital platform. This additional competition could force each licensee to offer more competitive odds, making people more likely to place bets and give the state more revenue from sports betting. It could also bring additional employers to the state, and therefore more jobs.
Governor Ned Lamont is in favor of this bill, according to a March 3 statement from his Office on Gaming, because “it is simpler, focuses exclusively on sports betting, and is, therefore, more achievable in this short legislative session. It also builds upon the state’s existing partnership with the tribes, is more likely to withstand legal challenges from third party competitors, and promotes a fair and competitive sports betting market outside the tribes’ reservations.”
While it is simpler, the idea that it would “withstand legal challenges” is questionable. While companies like MGM have threatened lawsuits in the past, if exclusivity were granted to the tribes, the opposite nearly guarantees litigation from the tribes. It seems like it would be unwise for the state to risk not only $250 million a year, but also relationships with two top-ten employers in the state over potential lawsuits from out of state companies.
Recent events make Lamont’s claims less certain, as well. With all focus on stifling COVID-19, there is virtually no chance either bill will pass this legislative session. Perhaps it would be in everybody’s best interest to table the discussion on sports gambling, maybe giving time for a representative to write a new bill once the state is functioning again.
So everyone’s cards are on the table: the tribes want exclusivity, the governor wants simplicity, and the Connecticut Lottery and off-track booking facilities want a piece of the pot. Sometime, hopefully soon, it will be Connecticut’s state representatives’ turn to place their bets on what is best for Connecticut’s residents.
Connor Giveans is a staff writer for Blue Muse Magazine
Headline Photo Credit: Thevegasparlay.com