The Register Citizen (Torrington, CT)
The do nothing gamblin’ blues
Lack of action a losing bet for Connecticut taxpayers
It’s hot outside, beach season, and the state Capitol is mostly empty these days as the governor closes out his eight-year tenure and members of the General Assembly fish for votes.
Precisely the time we should worry about lack of any action on a state gambling strategy.
All is quiet on Bridgeport Harbor, where a casino might or might not rise up to employ 2,000 people in the next few years. All is quiet when it comes to sports betting at Sportech’s Winners and Bobby V’s Off-Track Betting locations, which could someday host wagering on athletic events, or not.
And all is status quo at Foxwoods and Mohegan Sun when it comes to Connecticut’s gaming strategy — which may be just the way the tribes like it. But for the rest of us, it’s a lost opportunity that could cost tens or even hundreds of millions of dollars and the chance to add thousands of jobs.
This was the summer when we were supposed to see a special session of the General Assembly make some decisions about sports betting. Recall, the U.S. Supreme Court in June made it legal for states to zoom ahead on that front, and many, notably New Jersey, are doing just that in the hope of sparking a new industry.
This was the summer when we were supposed to figure out whether we’re better off sticking with the Native American tribes and their payments to
the state totaling 25 percent of dwindling slot machine revenues — or move to a broader, commercial casino system with companies such as MGM and Penn National. That might yield more money for the state, but the General Assembly failed to sanction a study.
This was the summer when we were supposed to look at online gaming, an unpalatable and parasitic activity as it stands now, which isn’t going away and could come under state regulation to the betterment of bettors and taxpayers alike.
Instead, we’ve got nothing but nice weather and a colorful campaign season. Not bad, but it’s a formula for failure in 2019 and beyond.
What we could see this summer, and soon, is a spat in East Windsor over the possible construction of a casino built jointly by the Mashantucket Pequot and Mohegan tribes. That’s now in a legal quagmire that shows no sign of ending, but permits are coming up for approval.
And what we will see, on Aug. 24, is the opening of MGM Springfield, the $950 million casino resort just over the state line, with Stevie Wonder performing Sept. 1. At least it will employ some Connecticut residents.
As for our slow-burn failure? Here’s what’s going to happen, month-bymonth.
⏩ January: The new Legislature will convene amid hope and hoopla.
⏩ February: The new governor will propose a budget and say he’ll listen to gaming ideas.
⏩ March: Committees will convene public hearings on competing gambling proposals, most notably the $675 million MGM casino plan for Bridgeport Harbor — for which the company is seeking only the right to bid openly, not a license.
⏩ April-May: The House and Senate will sit in their ornate chambers but won’t pass meaningful gaming legislation. “We don’t have enough information,” they will say as lobbyists on all sides pound them with conflicting facts.
⏩ June: In a final punctuation of inaction, the General Assembly will gavel the session to a close in June — almost a full year from now — and we’ll have done nothing as other states eat our lunch.
Aaaaaagh! We can gather what we need right now! Trouble is, we really need a broad, comprehensive strategy, but we’re stuck on details. For example, the tribes claim they own the rights to sports betting under their ’90s-era agreements with the state. The state claims that’s not true, but has no intention of icing the tribes out of the action altogether.
Following federal law, the state is negotiating with the tribes. But there’s no sign of an agreement. And without a deal, there’s no reason for the Legislature to go into a special session to set the direction of sports betting.
That means Sportech, the Toronto-based, historically British company that owns the OTB locations and sells racetrack technology in 37 states from its New Haven offices, can’t move forward with sports betting in its home state.
“MGM is very much engaged in conducting really a nationwide analysis of where we think the sports betting opportunities are and we think that Connecticut could be an attractive market if properly regulated and the market is open,” said Uri Clinton, senior vice president and legal counsel for MGM Resorts International.
The good news: As we burn through summer, there are things Connecticut can do.
“Many states have used their contracting rights and their procurement processes to issue requests for information, to start studies,” Clinton said. “Connecticut could do any of those things. ... We’ve been pushing for almost three years for a comprehensive, global approach.”
Gov. Dannel P. Malloy’s economic development department could conduct a study, but would anyone buy it after he’s gone next year? At the least, his administration could put out a request for information, and collect, say, $50,000 or $100,000 from potential casino bidders, setting that money aside for a study of the market in early 2019.
As for siting a Bridgeport or other commercial casino, it’s the same story. We don’t know whether that would be good or bad for the state because, once again, we haven’t studied it.
I’m not naive; of course the tribes precisely don’t want progress here, except in their legal case to extract federal approval of their joint agreement in East Windsor.
But here are the numbers, saved for last: The tribes’ payments to the state will drop below $200 million in 2019-20, with MGM Springfield and the giant Boston casino both open. Between Bridgeport (up to $200 million), sports betting (maybe $60 million) and regulated online gambling, we’re almost certainly looking at more than $200 million in revenues, which could happen more efficiently with several players in the market, even if that means we lose some Mohegan and Foxwoods money.
Or, it could happen that we’re better off sticking with the tribes. We don’t know now and we won’t know when the issue makes headlines next spring, and so we will we set ourselves up for another summer of inaction in 2019.