Who Gets To Control Connecticut Sports Betting?

They say that deep in the Foxwoods, the Mohegan Sun also rises. But the sky might not be so bright for tribal sovereignty when it comes to Connecticut sports betting. Currently, there is a fight over who gets to control the lucrative new industry in the Constitution State. As legislators argue over which entity or entities should manage CT sports wagering, the Mohegan and Mashantucket Pequot people are gearing up for a fight.

It is a foregone conclusion that land-based sports betting is coming to Connecticut. That much is a given. However, as the state enters the 2019 legislative session, the lingering question – and really, the only question – is who exactly gets to offer the pastime to the public in an official, legal capacity?

Connecticut Sports Betting’s Potential Service Providers

Currently, there are four primary suitors all vying to be the de facto Connecticut sports betting provider, and though it’s possible that each will play a role in offering the product to the public, right now the fight is over which entity gets the biggest piece of the pie – or, perhaps, even the whole pie:

• Mohegan Tribe and Mashantucket Pequot Tribe
• The Connecticut Lottery Corporation
• National casino/sportsbook operators (MGM, DraftKings, FanDuel, etc.)
• Sportech off-track betting (OTB) venues

Each of the above entities has an argument in its favor, albeit the tribal argument – which is currently predicated on existing state-tribe compacts and their exclusivity arrangements – seem to be the most compelling from a legal perspective. Before examining this, though, it will help to take a look at the three other players first.

The Connecticut Lottery Could Offer Wide-Reaching Sports Betting

One of the enduring trends in the nationwide legalization of sports betting is in state lotteries overseeing the process. In Delaware, the first state to offer sports wagering after the federal ban was lifted, the state lottery simply declared its oversight, made some rules, and got brick-and-mortar sports betting pushed out the door in just a couple of weeks.

While special historical circumstances played a role in that, any state without explicit sports betting bans in their laws could simply give oversight authority to their lottery corporations. After all, this has many benefits, chief among them being the lottery’s state-wide retail footprint.

It is likely that any sports wagering products offered by state lotteries will eventually be offered anywhere lottery tickets are sold. Many state lottos also have online components which could serve as the framework for expanded mobile betting.

For the state, lottery management of sports betting is by far the most profitable in terms of revenue. Other avenues will, at best, provide the state with a small share of overall revenue in the form of taxes, while the lottery would as a matter of course give the state all its sports betting revenue.

National Casino Operators Want A Connecticut Presence

Connecticut has long given casino gaming exclusivity to the tribes in the state, but national commercial casino chains have repeatedly tried to break into the state. Most notably, MGM Resorts International – the second-largest casino operator in the world – has for years been trying (and failing) to get a license to build a casino in Bridgeport, CT.

Of the contenders, outfits like MGM and sports betting upstarts like FanDuel and DraftKings have the weakest argument from a legal perspective, though it’s not entirely out of the question that they could legally operate in the state.

It’s also worth noting that DraftKings, FanDuel, or another bookmaking service like William Hill could operate within the state’s two existing tribal casinos (the Mohegan Sun and the Foxwoods Resort Casino). Ostensibly, the tribes would be able to contract their bookmaking services out to whomever they wish. It’s unclear if a brand like MGM could fill that role, however.

Sportech OTB Locations Could Be A Natural Fit For Sports Betting

Sportech operates 16 off-track betting locations in Connecticut, where they offer action on horse racing, greyhound racing, and jai alai betting. Because of their installed presence in the state and their acumen in dealing a very similar product to sports betting. It would be an easy transition, and the brand’s infrastructure in the state is its primary selling point.

Sportech chairman Richard McGuire makes his case succinctly: “We’re regulated already…We think that both ourselves and [the Mohegan Sun and Foxwoods Casino] are clearly regulated…and can deliver a product very quickly to Connecticut.”

By aligning his brand with the CT casinos and not seeking exclusivity, McGuire has taken a shrewd and potentially winning tack in the confines of the current debate. At the very least, the tribes would be more receptive to Sportech and the company’s limited installation base as a competitor than they would be for the state lottery or a huge industrial rival like MGM.

The Tribes, Their Compacts, And Sports Betting Exclusivity

Back to the main issue: Connecticut casino gaming is the exclusive domain of the Mohegan Tribe (Mohegan Sun) and the Mashantucket Pequot Tribal Nation (Foxwoods Resort Casino). Both entities have binding tribal compacts with the state to that effect, pursuant to the Indian Gaming Regulatory Act (IGRA, 1988).

Mashantucket Pequot chairman Rodney Butler, speaking on behalf of both CT tribes, says their compacts with Connecticut make it “clear to us that sports betting is…a casino game, and from that perspective it falls under our exclusivity.”

Further, a recently-proposed bill that has bipartisan support in the state legislature (SB 17), seeks to give the Mohegan and Mashantucket Pequot peoples sole operation of sports betting while the Connecticut Lottery would operate online Keno (ostensibly as a compromise for not pursuing sports wagering operations of its own).

Doesn’t Class III Tribal Gaming Already Allow Sports Betting?

For those following sports betting legalization around the US, this question must be asked. After all, New Mexico tribes – namely the Pueblo of Santa Ana (Tamaya) – have successfully installed legal sports betting without any approval from the state government.

Their argument is simply that Class III gaming – which is officially defined as “all forms of gaming that are not Class I gaming or Class II gaming” – implicitly includes sports betting, but only if existing state laws do not explicitly ban sports betting.

Since Connecticut law does not mention sports betting whatsoever, this argument seems as though it could be successfully employed. However, re the CT tribal compacts specifically, there is a snag: Instead of defining Class III gaming as the above (which the compacts do), added language uncommon to other tribal compacts actually outlines what specific game types Class III gaming entails, barring all others. Unfortunately, sports betting is not included in the approved list.

Who Will End Up Offering Connecticut Sports Betting?

When it comes to which of the above groups ends up with a hand in legal Connecticut sports betting, all anyone currently has to go on is pure speculation, save for one truth: At the very least, the Mohegan and Mashantucket Pequot tribes will offer the pastime at their casinos. No sports wagering agreement will succeed legislatively without this allowance.

As for whether or not the tribes get the exclusivity they’re seeking via SB 17, that remains to be seen. Each of the other avenues above could be installed as complementary to whatever the tribes offer, as well, but there will be resistance if the tribes view said avenues as too competitive. Thus, the Sportech OTB angle makes the most sense out of the existing options if the push for exclusivity fails.

Whatever the outcome, however, you should expect the state to launch its first brick-and-mortar services for sports betting in Connecticut sometime before the end of the year, probably before the beginning of the lucrative NFL season kicks off in September.

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