GOING ALL IN
Foxwoods joining pact makes sports betting near certainty in CT
Gov. Ned Lamont’s administration announced Thursday a comprehensive deal with the operators of Foxwoods Resort Casino and the Mohegan Sun resort and casino for sports betting and online gambling, a pact that has garnered bipartisan support and was widely anticipated after the state reached a Mohegan-only agreement earlier this month.
With the new deal, Connecticut aims to generate tens of millions of dollars in new revenues, while keeping the state competitive with gaming being offered or considered in neighboring states. Among its key provisions are an 18 percent tax rate for the first five years on new online commercial casino gaming, followed by a 20 percent rate for at least the next five years. There would be a 13.75 percent tax rate on sports wagering.
In addition, the Connecticut Lottery will have the right to operate 15 retail sports-betting locations, as well as an online sportsbetting “skin.” The lottery will also have the right to sublicense locations to the state-licensed parimutuel operator and be able to
open retail sports-betting venues in Hartford and Bridgeport. At the same time, iLottery and Keno would be expanded through the Connecticut Lottery, a provision that would include the sale of online draw tickets.
“We’re proud of this landmark agreement with the state of Connecticut that cements a historic moment for our Tribal Nation,” Mashantucket Pequot Tribal Chairman Rodney Butler said in a statement. “This agreement bolsters the state’s economic development and growth, and allows us to develop a stable economic foundation for the future of our tribal community. We thank Gov. Lamont, members of the southeastern delegation, the Black and Puerto Rican Caucus, and the many members of the General Assembly who have supported us continually throughout this journey. We are grateful for their friendship and look forward to working together as this proposal moves forward.”
If approved, people physically located in Connecticut would be able to bet on sports events online and at locations across the state, and wager on other casino games online or on mobile apps. The roster of games would depend on the companies offering bets.
DraftKings, one of the largest sports-betting providers, has an agreement with Foxwoods and would most likely join with local gaming companies to offer different options.
“Connecticut is on cusp of providing a modern, technologically advanced gaming experience for our residents, which will be competitive with our neighboring states,” Lamont said in a statement. “Our state’s tribal partners have worked with my administration thoughtfully, deliberately, and in a constructive fashion for the past few months, and we have achieved an agreement that is best for Connecticut residents and their respective tribal members.”
The agreement would also include safeguards against problem gambling, according to state officials and Mashantucket Pequot and Mohegan leaders.
“It’s actually easier to track people and their play and identify problem gaming (online) sooner rather than later because it’s all registered via the platform,” Butler said in an online press conference Thursday. “Online, although you do have easier access, we have much tighter controls and tracking measures to look for problem gaming.”
To be enacted, the plan will also require the state legislature to approve supporting legislation. State Sen. Cathy Osten, DSprague, whose district include the Foxwoods and Mohegan establishments, is among the legislators optimistic about the prompt passage of such a bill.
“It should happen, I’m hoping, within the next week or two,” Osten said in an interview Thursday. “This is something that could happen very quickly.”
Republican legislators also hailed the announcement, with those endorsing the plan including the southeastern Connecticut trio of state Sen. Heather Somers, state Sen. Paul Formica and state Rep. Holly Cheeseman.
“It’s great news. Our tribes are one of the largest contributors to our state’s economy and have been faithful employers and partners with our state for more than 25 years,” Somers said in a statement. “Significant revenue can be realized by our state in a very short timeframe. That revenue will improve our weakened economy and create jobs which are desperately needed after the devastating aftermath of COVID.”
The U.S. Department of the Interior would also be involved in the approval process.
“If we get this through the legislature in the next four weeks… and we’re in front of Interior and they have a 60- to 90-day review process, and at the same time, the state’s putting together its regulations for gaming,” Butler said. “Then we get approvals in a matter of months and launching i-gaming and sports betting by the end of summer.”
Significant support — but also concerns — about new deal
Connecticut’s new deal with the Mashantucket Pequots and Mohegans encompasses a license agreement for 10 years with a five-year extension option.
“When you look at it as an entire unit, we actually don’t expect it to be much more than 10-15 percent of the current operations,” Butler said. “We expect it to be a nice bump, which will help us. But we don’t see it surpassing our landbased revenues anytime in the near future.”
For February, Foxwoods reported slot revenues of $22.5 million, which resulted in an $8 million direct payment to the state.
In a major concession, both tribes have agreed to halt development of an East Windsor casino through the duration of the agreement.
“The commitment that we’ve had to East Windsor and our belief in that project, quite frankly, was the most difficult part to agree to some sort of delay as a part of this deal,” Butler said in the press conference.
“That was something that came from the governor’s office. He’s been public about that for what he’s explained to me as legal concerns with the project. We just agree to disagree, quite frankly, on that.”
Pressure for the state to reach an agreement that also included the Mashantucket Pequots grew significantly after the announcement about two weeks ago of the unilateral deal with the Mohegans. Mashantucket Pequot leaders had criticized the Moheganonly deal. They had said that such an agreement could not exist without the participation of both tribes because it would affect 1990s compacts between the state and the tribes — which are under federal control.
Other groups such as the legislature’s Black and Puerto Rican Caucus also pushed for Lamont’s administration to reach a two-tribe deal.
“We didn’t see it as fair or equitable that we left one of the tribes out,” state Rep. Geraldo Reyes Jr., D-Waterbury, chairman of the Black and Puerto Rican Caucus, said in an interview. “It wasn’t a matter of picking sides; it was simply a matter of it not being right. Had the government and Foxwoods reached an agreement, we would have done the same thing for the Mohegans.
“Any new revenue stream is a plus for the state of Connecticut ... We should have done this a long time ago. It’s amazing that it took this long. But the day is here, and we’re happy.”
At the same time, Mohegan leaders expressed their satisfaction with the new pact.
“The Mohegan Tribe is very thankful to our partners in government, both the Mashantucket Pequot Tribal Nation and the state of Connecticut, for reaching collective agreement on a path forward for modernizing our state’s gaming entertainment industry,” Mohegan Tribal Council Chairman James Gessner Jr. said in a statement. “This will allow Connecticut to generate tax revenues from sports and online gaming that are competitive with other states, to the benefit of both state and local municipal budgets, as well as our tribe’s members. We look forward to continued work with the General Assembly on this topic, especially the many dedicated legislators who have partnered with and supported Connecticut’s tribes throughout this process.”
The Mashantucket Pequots and Mohegans have long claimed exclusive ownership of sports betting and online gaming in the state under their separate compacts, which give their casinos sole rights to “casino games” in exchange for 25 percent of slot machine revenues. Those payments have totaled more than $8 billion since Foxwoods opened in Ledyard in 1992, followed by Mohegan Sun’s launch in Uncasville in 1996.
Butler explained in the press conference why the Mashantucket Pequots agreed to the Connecticut Lottery’s participation in the new operations.
“The state really wanted Lottery to be a part of this, and so for that they wanted their responsibility to manage those retail facilities,” Butler said. “Ultimately, we were OK with that. It certainly adds a level of competition that we think is manageable. But I will say that when you look at the number of retail locations — clearly when you look at other states — we felt like this number was OK, but probably should be a little lower. It balances out when you look at everybody being online and our ability to do online gaming.”
Connecticut Lottery officials confirmed in a statement their backing for the deal.
“We’re pleased that the agreement would allow the Connecticut Lottery to modernize our business through online sales of some existing lottery games and to grow our contribution to the state by introducing both online and retail sports betting,” the statement said. “The CLC has already contributed nearly $300 million to the General Fund through the end of last week, and we are poised to continue delivering responsibly for the state through these additional revenue streams.”
Launching sports betting and online gaming in Connecticut has long hinged on the tribes’ involvement in those operations and also deciding on the role of other gaming providers such as the Lottery; Sportech, the operator of the state’s off-track betting outlets; and outside commercial-gaming companies such as MGM.
In a statement Thursday, Sportech officials reiterated the concerns that they have expressed since the announcement of the unilateral Mohegan deal. As the state’s sole pari-mutuel operator, the company runs 11 locations around the state, with licenses for a total of 24. The firm’s regional headquarters are in New Haven.
“Sportech supports expanded gaming in the state; however, federal and state law mandates a level playing field,” the statement said. “Today’s announcement does not appear to offer that level playing field; Connecticut consumers will be deprived of a healthy competitive betting marketplace and the Connecticut jobs that Sportech supports will be at risk. We continue our dialogue with the administration in pursuing gaming expansion that does not contravene laws and discriminate against not only our employees, but all Connecticut consumers.”
Foxwoods and Mohegan Sun comprise two of the largest, minority-owned businesses in Connecticut, cumulatively employing thousands of state residents. Foxwoods’ headcount now totals “just above 2,000,” compared with a pre-pandemic peak of 5,000, according to Butler.
“We’ll be adding back staff naturally — hopefully to the same level we were pre-pandemic— and we don’t see this is as having an impact on that,” Butler said. “Hopefully, it actually accelerates that. What we’ve seen in other markets with sports betting and i-gaming is that it drives foot traffic back to the physical properties because we’re in this ecosystem of marketing and branding.”
Among other developments this week, both Foxwoods and Mohegan announced chief executive changes. Foxwoods has named Jason Guyot as its permanent CEO and president. He had served as interim chief executive since last April. Mario Kontomerkos, CEO and president of Mohegan Gaming & Entertainment, will step down at the end of the month. He has held the position since October 2017.