Mohegans agree to sharing sports betting with CT Lottery
Mashantucket Pequots balk at proposed 20% tax on iGaming
The CT Lottery, Mohegan Sun and, presumably, Foxwoods Resort casinos would have the right to offer sports betting and online gambling under the terms of a structure announced Tuesday by Gov. Ned Lamont and the Mohegan tribal chairman, James Gessner Jr.
The joint statement was released six hours after the governor’s chief of staff, Paul Mounds, told legislators at a public hearing that the administration had struck a deal with the Mohegans and were close with the Mashantucket Pequots.
While only the Mohegans are a party to the deal at this point, the terms are what the administration envisions for a major expansion of gambling by the tribal casinos and lottery, both online and at sports-betting themed venues slated for Hartford and Bridgeport.
The sticking point with the Mashantucket Pequots, the owners of Foxwoods, is the 20% tax the state proposes to collect from the casinos on iGaming, the term for offering casino games online. The Mashantucket Pequots want an an 18% rate.
“These parties are so close that it is frustrating that we’re not there yet,” said House Speaker Matt Ritter, D-Hartford. He said the delay in allowing sports betting is costing the parties far more money than the difference in two percentage points on the tax rate.
Aside from the 20% tax the state would collect from online casino games, it would collect a 13.75% tax on sports bets placed with the casinos, online or in person, rates that the administration says match or exceed what is collected in other states where sports betting and online gambling are legal.
The release of the terms appears to be a step in continuing negotiations, at least with the Mashantucket Pequots, and not a finale. Also, the licensed vendor of off-track betting, Sportech, threatened litigation, unhappy with being left out of the online portion of sports betting.
“Now that the Governor Lamont has laid bare the confidential terms of our negotiations, you can see the significant and substantial concessions made by both Tribes,” said Rodney Butler, the tribal chairman of the Mashantucket Pequots.
The primary concession was a willingness to share the sports betting market with the CT Lottery.
Sen. Cathy Osten, D-Sprague, whose eastern Connecticut district is home to Foxwoods and Mohegan Sun, declined to offer an assessment of a deal whose announcement she deems premature.
“I think once Mashantucket is on board, then we’ll have a real deal. Until that happens, we don’t have a real deal,” Osten said.
No one suggests the state can go forward without an agreement with both tribes, which have exclusive rights to casino games in Connecticut. Rather than fight in court over whether sports betting is a casino game, the state and tribes turned to negotiation.
“This agreement represents months of hard work and dedication to getting a deal that’s best for the residents of Connecticut and moves our state forward when it comes to the future of gaming,” Lamont said in the announcement.
Neither Gessner nor Lamont referred to the Mashantucket Pequots in the announcement.
“This path will allow Connecticut to generate tax revenues from sports and online gaming that are competitive with other states and help keep Connecticut with those states when it comes to growing our economy and benefiting the state budget,” Gessner said. “We’re thankful to Governor Lamont and his team, and we look forward to continued work with the General Assembly as this process continues.”
Butler suggested that the announcement was disrespectful, focusing his displeasure on the administration and ignoring that the Mohegans found the deal acceptable.
“After months of closed-door negotiations, it’s offensive that Governor Lamont would announce an agreement with only one of the two Tribal Nations that have been a party to the negotiations, despite full knowledge that both sovereign Nations are needed to implement any agreement,” he said in a statement.
Speaking to reporters earlier, he suggested that the Lamont administration would get good reviews for the deal, even if it was amended as sought by his tribe.
“When there is an announcement, I think you’ll be pleased with the ability of the governor’s staff to negotiate — probably shocked in some areas,” Butler said. “What do I say about a good deal — nobody leaves happy, right? And so it’s been painful. But again, it’s the right thing to do for this market to finally move this across the finish line.”
The agreement would give the lottery the right to operate 15 retail sports betting locations, as well an online sports book. It would have the right to sub-license some locations to Sportech, the licensed OTB vendor.
Any license agreement would be for 10 years, with a five-year extension option.
The deal envisions “new retail sports betting venues” in Hartford and Bridgeport, similar to the Bobby V’s sports bars and OTB facilities Sportech operates near Bradley International Airport in Windsor Locks and in downtown Stamford.
Sportech has been lobbying for a share of online sports bookmaking. Its posture Tuesday evening was combative, one most likely geared to keeping negotiations open.
The company threatened litigation:
“One year ago, Governor Lamont stated he would seek a fair resolution regarding gaming expansion involving existing gaming operators that ‘must be designed to avoid and withstand endless legal challenges.’ Regretfully, the Governor’s announcement this afternoon, that principally excludes Sportech from expanded gaming, leaves us with little option but to pursue legal recourse on behalf of our 400 Connecticut employees.”
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