Connecticut Strikes Sports Betting Deal With Mohegans; Mashantucket Pequot Negotiations Continue | Connecticut Public Radio
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Connecticut Strikes Sports Betting Deal With Mohegans; Mashantucket Pequot Negotiations Continue

Mar 2, 2021

After years of private negotiations with the two tribal nations who operate casinos in Connecticut, the state has reached an agreement with at least one of them on legalized sports betting.

The Mohegan Tribal Nation and the governor’s office have struck a deal on expanded gaming.

“The Mohegan Tribe is proud to have reached this agreement with Governor Lamont and the State of Connecticut,” Mohegan tribal Chairman James Gessner Jr. said in statement. “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.”

The terms of the Mohegan deal give Connecticut a 13.75% cut of sports betting revenue, which is much more than the 8% originally proposed by lawmakers.

That and two other points of the deal could give Gov. Ned Lamont the global resolution on expanded gaming he’s been seeking. First, despite the tribes’ arguing for years that only they could operate sports betting, the Connecticut Lottery Corporation is now a prospective vendor. Second, under the deal, Connecticut Lottery would have rights to offer sports betting at new brick-and-mortar facilities in Bridgeport and Hartford.

“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 a written statement. “We are incredibly fortunate to have such a devoted partner in these efforts like the Mohegan Tribe, as they have been open to negotiation, honest discussion, and a positive path forward that is beneficial for both their tribe and the State of Connecticut.”

As part of the agreement, the state receives 20% of iGaming revenue.

While the agreement sheds light on what legalized sports betting could look like in Connecticut, the hard-fought battle to bring this type of gambling out of the shadows isn’t over yet.

The state has long-standing compacts with both the Mohegan and Mashantucket Pequot tribal nations around gambling. Those need to be updated before moving ahead with expanded gaming.

Once negotiations conclude, lawmakers can move in to pass the agreements into law. Also, the tribal nations would need the federal Bureau of Indian Affairs to sign off on any amendments to the compacts -- a process that can take at least 45 days.

But the state still hasn’t agreed to terms with the Mashantucket Pequots.

Mashantucket Pequots Want ‘A Generational Agreement’

Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, was offended by the announcement from the state and Mohegan tribe.

“We have participated in these discussions in good faith and consider today’s events extremely disrespectful in terms of process and substance,” Butler said.

Prior to the announcement, the Connecticut General Assembly’s public safety and security committee held a public hearing on gaming expansion. There, Butler said he was motivated to strike “a generational agreement” for his tribal nation, one that includes more money to fund health care for tribal elders and youth education, along with money to secure the land.

But he emphasized that the revenue cut to the state was keeping him from shaking hands with the governor.

“It literally means a million or two one way in each direction on a conversation that’s worth hundreds of millions in time to the state,” Butler said.

The 13.75% tax on sports betting and 20% on iGaming are larger than figures lawmakers offered in the most recent sports betting legislative proposal -- 8% and 10%, respectively.

Butler had spoken to reporters after the hearing, while the state -- in the person of Paul Mounds, Lamont's chief of staff -- was trailing a not-yet-announced agreement.

“I would say when it comes to the tribal nations we are much closer with Mohegan at this time and that it is my belief that we can have a firm agreement with [two] tribal nations, but -- if you had to use football terms -- we’re at first-and-goal at the one with the Mohegans,” Mounds said Tuesday morning.

Butler then tried to pour cold water on a potential deal being announced without his tribe’s approval.

“I can assure you that we’re in solidarity with our Mohegan cousins on this,” Butler said. “Although they may have agreed to some points, it’s a three-way negotiation.”

Yet just hours later, the state and the Mohegan tribe moved forward with their announcement.

The Mashantucket Pequot tribal chair still says on his side a deal is close, but he believes the state is getting the better end of it -- not only because of the revenue cuts but also because of concessions he said the tribes are making on the right to operate sportsbooks in Connecticut.

“Just permitting Lottery to participate in full sports betting, absent tax or revenue share, is a major allowance,” Butler said.

Conceding Exclusive Rights

Both tribes have long argued that sports betting was a casino game and that they alone should have exclusive rights.

The presence of the Connecticut Lottery Corporation in this agreement contradicts that.

“After the final agreement is reached and any related legislation is passed and signed, we will be prepared accordingly,” said Connecticut Lottery Corporation spokesperson Tara Chozet.

Earlier in the negotiations, the Mashantucket Pequots told Connecticut Public about discussions of a potential revenue share to the tribes should other vendors come to the table.

But that doesn’t appear to be happening.

Instead, the Connecticut Lottery will play a significant role in the delivery of sports betting to local residents. It’ll be able to run sports betting at 15 brick-and-mortar sites, along with the right to carry it online.

The Connecticut Lottery can also “sub-license” any of those locations to a state-licensed pari-mutuel operator. That provision of the deal could benefit off-track betting vendor Sportech. Sportech offers OTB at several Connecticut establishments, including Bobby V’s in Windsor Locks.

But Sportech was miffed by Tuesday’s announcement, as it hoped to be a primary licensee.

“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,” a spokesperson for Sportech told Connecticut Public Radio Tuesday. “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.”

Lawmakers will get to work on expanded gaming legislation once agreements are finalized.

There’s a placeholder bill that isn’t “comprehensive,” according to state officials. It means that there’s not yet a concrete plan to fund the type of problem gambling that could intensify in an expanded gaming landscape.

The state is considering giving 2% of whatever it makes on expanded gaming to entities that counsel problem gamblers.