CT tribes want online gambling just as much as sports betting

With Connecticut Gambling Expansion On Lockdown, The Internet Might Be The Key

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Sports betting has gotten all the attention from state legislatures this year, but Native American tribes in Connecticut have their eyes on a bigger prize.

Rodney Butler, chairman of the Mashantucket Pequot tribe that owns Foxwoods, points out that online gambling in New Jersey brings in more revenue for casinos — and more taxes for the state — than sports betting does. This has remained true even during the busy football season for NJ sportsbooks.

Butler sees a synergy between mobile sports betting and online gambling. The Connecticut tribes are asking for both verticals in a proposal pushed by Sen. Cathy Osten.

“For everyone that’s looking at sports betting,” Butler said, “look closely at the New Jersey model and the true success there is the marriage between sports betting and iGaming. Collectively, they really feed off each other.”

The impact of CT tribal gaming

In the 27 years since tribal gaming began in Connecticut in 1992, the Mashantucket Pequot and Mohegan tribes have combined to generate more than $8 billion in contributions to the state. Even apart from direct gambling revenue, their tribal casinos create an immense economic impact in the region.

Speaking at the National Indian Gaming Association (NIGA) conference at Mohegan Sun in September, Butler recalled that Connecticut didn’t enter the tribal compacts thinking gaming was going to be a great economic boon.

The governor never thought tribal casinos would work in southeast Connecticut, according to Butler, but saw it as a way to keep outside gambling companies away.

“They were trying to resolve a nagging issue that they had with these poor Indians,” he said. “[The tribes] were going to build a casino that was never going to be successful. It had nothing to do with creating jobs and infrastructure and supporting the region. It was really to quiet us down, but also to quell the burgeoning commercial gaming industry — which is ironic given the conversations we’re having today.”

Tribal, state leaders at odds over CT online gambling

The tribes have proven to be good partners to Connecticut, paying back 25% of slot revenue in exchange for exclusivity over casino gambling. The state gave them casino gambling as an afterthought, and they turned it into much more than anyone expected — including the operation of Vegas-style resorts at Foxwoods and Mohegan Sun.

Those numbers, however, are declining.

The state share from tribal gaming peaked at $430 million in 2007 and has been trending steadily downward since, reaching $255 million this year. The decline stems from several factors, including the economic recession and an increase in gambling options in neighboring states.

So the tribes say: ‘Allow us to modernize our gaming offerings by bringing casino games and sports betting to the web and mobile devices, and we’ll bring that revenue back up.’

With all the good the revenue has done for the state and its municipalities, the natives feel they deserve some loyalty in return. And lawmakers surrounding their facilities in southeast Connecticut agree.

“There needs to be an understanding that the original Connecticut-ers before Connecticut was Connecticut were the Native Americans,” Osten said. “I think we need to put that out there and we need to fight the people that are stopping us from moving forward these two businesses which support Connecticut and have always supported Connecticut. We need to move beyond an executive branch that is stymieing that. We need to move beyond a bad corporate business that is trying to stymie our work here.”

MGM at center of tribal-state tensions

Other lawmakers see the falling tribal gaming revenues and feel it would be a mistake to hand over exclusivity on new forms of gambling without allowing other commercial gaming interests to compete.

Allowing tribes to have exclusivity to gambling off tribal lands also opens up the state to legal challenges, as seen in MGM’s lawsuit seeking to overturn federal approval of the tribes jointly operating a casino in East Windsor near Hartford. The proposed Tribal Winds casino would be located 12 miles from MGM’s casino in Springfield, Mass.

Butler asserts that MGM has no offices in the state and that all of its 80 employees in Connecticut are lobbyists. The tribes, meanwhile, employ some 18,000 people.

Osten further alleges that MGM misled the people of Connecticut when proposing to build a $600 million casino resort in Bridgeport, near New York City. Never given that opportunity, MGM subsequently angered some local legislators by instead buying a racino in Yonkers, just across the border.

“They have promised people the world and never delivered on any single issue in Connecticut that they have promised,” Osten said. “I don’t like MGM, and I don’t like them because they have lied to people from Day 1. They’re just trying to take our market, our jobs, and we need to fight back on somebody that does not tell people the absolute truth about the industry.”

Osten lays out tribal asks for gaming bill

After negotiations for Connecticut iGaming broke down between new Gov. Ned Lamont and the tribes earlier this year, Osten released a draft bill that she hoped to get taken up in a special session. The proposal drew scorn from Lamont and Rep. Joe Verrengia, who co-chairs the Joint Committee on Public Safety and Security.

“Trying to bypass the governor and work a deal is not a strategy that I would subscribe to,” Verrengia said.

The bill would extend tribal exclusivity to both iGaming and sports betting in Connecticut, providing 10% of revenue from those activities to the state. One concession allows the state lottery to offer limited online lottery draw games. The tribes would commit $100 million to build that casino in Bridgeport.

Verrengia, on the other hand, believes the state could do better by opening up gaming to private companies. He contends that the tribes aren’t fully committed to building a casino at either site, because they want people to continue to visit their existing resorts.

“They really don’t want a Bridgeport casino,” Verrengia said. “The governor wants the Bridgeport casino. The model they’re talking about, the tribes investing $100 million and the state coming up with the money to build a hotel around that, that’s just outright bizarre given we had a private major casino willing to spend a half billion dollars to build a full destination casino with all private funds.”

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Online gambling could be key to CT negotiations

The tribes want sports betting but the real Holy Grail for them would be to get online casinos in Connecticut. Verrengia hopes the latter will be the catalyst for an agreement on a comprehensive gaming resolution.

“The money is not in sports betting for the tribes,” Verrengia said. “The money is in casino mobile. Online casino gaming is something that can be negotiated. Tribes, you get this percentage of casino play online and then the other stakeholders get a percentage of the sports betting.”

Verrengia said it’s his goal for the parties to come to an agreement by the end of the next legislative session, which begins in February. If that doesn’t happen, he could see Connecticut taking more drastic steps.

“If there’s no give, at some point we have to move forward with our gaming policy,” Verrengia said. “With all that said, I’m a big supporter of the tribes. If I can do something to give them a home-field advantage, I will. But when it comes down to it, I work for the state of Connecticut.”

- Matthew began writing about legislative efforts to regulate online poker in 2007 after UIGEA interfered with his hobby of playing small-stakes online poker while working as a sportswriter at the Los Angeles Daily News. Covering the topic for Bluff Magazine, PokerNews and now Online Poker Report, he has interviewed four U.S. Congressmen and 40+ state legislators. His poker writing has been cited by The Atlantic, Politico.com and CNN.com. Matt also has written on a variety of topics for Playboy Magazine, Men's Journal, Los Angeles magazine, LA Weekly and ESPN.com.
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