While the tussle over tribal exclusivity dominates the Connecticut sports betting discussion, a number of other outstanding issues remain as well.
A law governing CT sports betting already exists, but most stakeholders feel new legislation is needed to clear up a number of items.
Tuesday’s public hearing on a pair of Connecticut sports betting bills — S 17 and S 665 — yielded questions about integrity fees, single vs. multiple operators, and mobile sports betting.
Lottery CEO sees an “ideal business partner”
Greg Smith, president and CEO of the Connecticut Lottery, said the lottery is an ideal business partner for Connecticut sports betting.
Smith said it could return “four-to-five times as much money per dollar than any other operator” — a dubious claim similar to the one presented in Washington D.C. by Intralot. Like other lottery games, all of the profits would go to the state rather than the small return on profits that casinos would pay, Smith said.
He added that the lottery’s second distinguishing factor is that its sports betting operations would be fully customizable by the legislature:
- The lottery has 2,900 licensed retailers who offer lottery games, and the legislature can choose how many offer sports betting and the sort of wagers they can offer.
- A convenience store could have a simple win-loss wager while a sports bar offers a more complete sportsbook.
- The lottery is in talks with the same set of sportsbook operators, all of whom have US experience, that the Connecticut tribes previously considered before choosing a betting partner.
“If sports betting is not conveniently available to people geographically throughout the state and online through mobile, bettors will continue through their local bookie or illegal offshore websites they currently use, and the state won’t derive significant economic benefit from the legislation,” Smith said.
MGM puts in its two cents
MGM Resorts International doesn’t have a current stake in Connecticut but wants in. President of interactive gaming Scott Butera believes the state would benefit from involving the “biggest and best” sportsbook operator in the country.
Butera made several contentions on the Connecticut sports betting landscape, if the state pursues an open licensing process:
- Nine out of the 10 most successful markets in Europe are ones in which there’s open competition. With an open market, Butera contends Connecticut could realize more than $100 million in revenue annually.
- Reaching that figure would require statewide mobile wagering with remote signup.
- Connecticut can support six to seven operators.
- A competitive tax rate would be in the range of 8 to 10 percent, with licensing fees in the hundreds of thousands, “high enough so it’s only the biggest and best.”
- When MGM put a sportsbook in its Mississippi property Beau Rivage, revenue for table games doubled within a month.
Off-track betting parlors (OTBs) want to participate
Former MLB player and manager Bobby Valentine, who was born in Connecticut, operates two Bobby V’s Restaurant and Sports Bar locations in the state.
Both have off-track betting on the premises run by Sportech, which holds the exclusive license in the state to conduct off-track pari-mutuel wagering on horse racing, greyhound racing and jai alai.
Valentine noted that Sportech has been licensed for 18 years, runs 16 OTB locations with the ability to add 10 more licenses, and employs more than 400 people in the state.
He added that since the legalization of sports betting in nearby states, he’s heard of restaurant patrons driving to New Jersey to place a legal bet and then going home to Connecticut to watch the game.
Interestingly, Valentine is not taking the sports league line when it comes to integrity fees. He noted there are numerous commercial deals that could benefit all parties.
“In baseball, which has one of the best collective bargaining agreements with players getting 52 percent, I think most revenues will be from the increased interest in games.
Fans are going to stay until the 9th inning if they have an interest in the game, and they’re going to have an increased interest in a player or game if they have their $10 on the line. I don’t think there will be any problem with the sports industry reaching its hand out because they’ll be making plenty.”
The leagues weigh in
Sports leagues are perhaps at a disadvantage in the Connecticut sports betting discussion, as they don’t have any professional teams.
Kevin McGuiness, chief operating officer of Major League Baseball, spoke on behalf of the five major US sports leagues. Dan Spillane, senior vice president and assistant general counsel for the NBA, also spoke.
Clarence Nesbitt, general counsel for the NBA Players Association, provided the players’ perspective.
They asked that:
- Operators be required to pay for the use of official league data, particularly to settle in-game bets.
- Legislation give sports leagues the ability to propose restrictions on wagering on their own events.
- The state makes sure procedures are in place to address the threat to player safety posed by legal sports betting.
Asked what safety measures other states have put in place, McGuiness admitted they have left it up to the leagues.
On the issue of integrity
While McGuiness did not mention an integrity fee among his asks, Spillane did request a “modest 0.25 percent royalty to the sports leagues from the amount bet on their contests.” That ask from the NBA follows a year in which leagues did not convince a single state legislature they deserved a cut of sports betting revenue.
That gave Verrengia the opportunity to discuss what he mentioned to Legal Sports Report earlier this month, his openness to providing the leagues a fee if the money goes to a program in Connecticut supporting youth athletics.
Some supporters of both sports betting bills are in favor of tribal exclusivity.
Sen. Paul Formica, a sponsor of S 17, expressed that he wanted to get sports betting started and get revenue going. If the legislature then wanted to continue having the conversation on adding other stakeholders, then it could do so.
“Connecticut has a compact, and I believe that exclusivity needs to be honored and recognized,” Formica said. “From my point of view, the more we wait the more we lose, so this is about Connecticut gains and Connecticut revenue.”
Sen. Heather Somers agreed: “I would like to see it started with the tribes, then we can have further conversations on how that works in the future.”
Go mobile or stay inside casinos?
Rep. Craig Fishbein asked why sports wagering wouldn’t be limited to brick-and-mortar casinos if creating jobs was a priority. Fishbein scoffed at the notion that sports betting should be legalized because it is already being done in the state.
“Why not just have sports wagering at the casinos rather than allowing people to sit at home and wager on the internet?” Fishbein said. “You have to balance societal harms from the gates being open. We hear about children swallowing Tide pods. We then don’t turn around as a legislature and adopt it.”
Multiple operators make sense
Rep. Michael DiMassa stressed that consumers, and the state, would benefit from having multiple sports betting operators.
He imagined a scenario where someone near the Connecticut border from drives into the state to go to eat and bet on a football game on an app.
“Depending on how the committee and legislature decide to move forward on sports betting, you’re going to see many other markets benefit across the state, especially in border regions.
“If you have one vendor operating our sports betting, whether it’s the tribes and you have to physically go to the casino or they are the only ones to operate, it may not offer the necessary incentives to attract people on the borders of our state.”
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