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While sports betting and land-based casino expansion face complicated exclusivity issues with the state’s gaming tribes, there are fewer such debates about online gambling. As an enhancement of the games already offered at the two tribal casinos, bringing them online could fit within existing compacts.
With the tribes and the state alike looking to address falling revenues and decreasing casino jobs, online gambling could be the clearest path to bolstering both.
The two Connecticut casinos – Foxwoods (operated by Mashantucket Pequot) and Mohegan Sun – have seen a substantial drop in revenues over the past decade. Much of the decline can be attributed to increased competition from casinos in Rhode Island, Pennsylvania, Maryland, and Massachusetts.
Rodney Butler, chairman of the Mashantucket Pequot, stated at the Joint Public Safety and Security hearing that employment numbers at each casino have been halved from the 11,000 jobs they produced at their peak. Slot machines, he said, have decreased by about 3,000 at both locations.
Those drops have a significant impact on money going to the state. Rep. Michael DiMassa attested that gaming payments in Connecticut were down $104 million from 2009 to 2017.
Those payments still totaled about $270 million in 2018, but DiMassa indicated that combined payments are projected to decrease to $199 million in 2022.
Foxwoods and Mohegan Sun came out in favor of offering online poker and casino games last year.
Ray Pineault, president and general manager of Mohegan Sun, anticipates that iGaming would generate $10 million for the state in the first year of operation. That number would reach $22 million by year five, for a total of $80 million over five years.
That is $15 million more than the five-year total he projected for sports betting, and $50 million more than Keno. Taken together, the three activities could generate $178 million in state funding over the next five years.
“They also help us to solidify the partnership between the tribes and the state at a time when the situation on the ground is rapidly changing,” Pineault said. “We believe this is of profound importance for the economic health of Connecticut.”
A bipartisan bill (S 17) discussed at Tuesday’s hearing would authorize internet gambling and sports betting for the tribal casinos.
In her testimony, Anika Howard, vice president of brand marketing and digital for Foxwoods, submitted that online gambling revenue is easily outpacing online sports betting in other states. It is “by far the biggest opportunity,” she said.
Howard noted, however, that the cross-sell between online gambling and online sports creates additional opportunities for both.
“The customer experience and results in surrounding states have illustrated the impact of how these offerings work together …
“Beyond what other jurisdictions are doing, customer expectations of an acceptable experience are high. Customers want convenience. Customers want options. They expect an easy, mobile-first experience for everything. Gaming is no exception.”
At one point during the hearing, Rep. Craig Fishbein remarked that it is generally understood that sports betting is a game of skill, while poker is a game of chance.
Sen. Heather Somers responded: “I bet professional poker players think it’s a game of skill.”
Most of the 11-hour hearing featured local representatives from in and around the cities of East Windsor and Bridgeport testifying passionately about the need for casinos. Most of the focus was on the jobs they would create for their residents.
In 2017, the legislature approved a jointly-operated commercial casino, off-reservation in East Windsor.
The law required approval from the federal Bureau of Indian Affairs, but former US Department of the Interior secretary Ryan Zinke refused to sign the paperwork. He explained his reasoning to The Washington Post last month, saying the department “should not take a position on activity outside the reservation.”
However, the Post also reported this week that there is a federal grand jury investigating whether Zinke lied to federal investigators about the issue.
Connecticut Sen. Catherine Osten lobbed accusations against MGM, which opposed the East Windsor proposal. It would be located just across the border from its new MGM Springfield property in Massachusetts.
“I’m certain we’re going to find out that Secretary Zinke was acting in collusion with MGM executives. I might lose my temper about the bad actions by people who cost Connecticut workers jobs.”
A bill considered at the hearing would remove the requirement for the Secretary’s signature. The tribes say that Tribal Winds Casino is shovel-ready once the bureaucratic red tape is cleared.
Now that the tribes have opened Connecticut up to commercial casino proposals, MGM is interested in building one in the state’s most populous city of Bridgeport. H 7055 would create an open bidding process for a casino there.
The Pequot memorandum of understanding makes the tribes’ contribution to the state conditional on its exclusivity. That is, the state may not permit others to offer casino games.
While legislators contended that a mere request for proposals doesn’t violate this clause, tribal leaders asserted that the intent expressed by taking bids from others to offer casino games would be enough for them to stop their monthly payments to the state.
Here’s more from Butler:
“I ask any of you to go home tonight and ask your partner – wife, husband, what have you – if it’s okay for you to go test the waters, play the field a little bit, go on a singles cruise to see what’s out there, see if you can get a better house or cuter dog or better kids, and see what your partner says to you.
“It’s going to be a very expensive conversation.”