Should Connecticut grab a cut of the action?
What’s more American than gambling? Don’t look so shocked; we do it so much we really don’t even think about it. Betcha a nickel you can’t hit this curve. Bet’cha a dollar Billy won’t ask Phoebe to the prom. Sure, we don’t all go to the track or Vegas, but even the most sanctimonious among us still buys a Super Bowl betting box, a church lottery ticket or takes a shot with a March Madness bracket once in a while.
So when the Supreme Court of the United States recently handed down a ruling that will now make sports gambling legal nationwide, well, what was once the realm of gangsters and bookies is now going legit. States can now regulate, and directly make money off of, the betting on professional and amateur sports. C’mon, is this really a big deal? Oh yes. Mark Cuban, owner of the NBA’s Dallas Mavericks was quoted as saying that the value of every sports franchise just doubled as the income streams from legalized gambling would send team valuations through the roof. Double!
Now of course the question must be asked, how does Connecticut get in on this? It’s a fair question as currently the state has an arrangement with the Pequot and Mohegan tribes that this past fiscal year put around $226 million in state coffers from slot machines at their respective casinos. And the tribes have already told the state legislature that if the state authorizes sports betting without them, then the slot deal would be broken and we’d get nothing. So, are the tribes bluffing? Should the state work out a new deal with the tribes and negotiate some incremental increases for sports gaming, or ... should we go all in.
I spoke with former state lottery chairman Frank Farricker for additional insight and he’d rather see Connecticut bet on itself. “The slot revenue we receive is shrinking year over year because casino revenue is down,” said Farricker.
If so, why tie ourselves to an already leaky boat?
“Lotteries and slots are easy to manage but sports betting is hard to control. Connecticut would have to build a brand new gaming commission infrastructure to wrangle the casinos, the OTB, the lottery and now sports betting.”
But would it be worth it?
“Oh yes. Independent analysis projections show that with legal sports betting included, state gaming revenues could be in the $700-800 million per year range once the marketplace settles and matures.”
Wow. No wonder the worried tribes have already started posturing.
Unfortunately for the governor and the legislature, it’s not just about the money and whether or not to be satisfied with maintaining a fiduciary relationship with the tribes and their casinos. It’s also about jobs. In fact, most estimates put the tribal casinos as being worth 20,000 jobs in the state. If the state were to break its deal with the tribes, forgo the slot revenue and establish a new Connecticut Gaming Commission like Farricker envisions it would be great for building state revenue, but potentially painful for people who live and work in the areas around the existing casinos.
Our senators and legislators always say they make hard choices everyday. But this golden opportunity to significantly increase state revenues could come with a political price in the form of constituent job loses and increasing the size of government through investment spending. Not your typical investment spending on infrastructure or education either. Realistically though, there could be no greater long-term investment than Connecticut getting out in front of legalized sports betting and folding it into a new, better state gaming commission.
Because of our history with the tribal casinos, Connecticut already is ahead of many states in setting up the infrastructure needed to capitalize on this new sports gaming world. Start fresh, involve the current and future casinos, modernize and streamline the existing OTB and lottery, cultivate new mega-partners currently ramping up for sports betting and be first to the market. And being first is where the money is.
The Supreme Court has given us a gift that because of our statewide gaming experience we are uniquely qualified to unwrap and start playing with before other states have even read the instruction manual.