Gov. Ned Lamont and the Mohegan Tribe agreed Tuesday to establish online gambling and sports betting in Connecticut that for the first time allows nontribal gambling operators to compete for bettors.
The agreement quickly came under fire from the Mashantucket Pequot Tribal Nation and the state’s pari-mutuel operator.
The Mashantucket Pequots, who operate Foxwoods Resort Casino, are not a party to the agreement and their chairman said the announcement that failed to mention the tribe was “extremely disrespectful in terms of process and substance.”
Sportech, the pari-mutuel operator that would be sublicensed by the Connecticut Lottery Corp., to operate several retail sports betting sites, said it will sue because the agreement “principally excludes” it from expanded gaming.
The deal, which Lamont said will bring tens of millions of dollars in revenue to the state, calls for a 20% tax on online gambling offerings, or “iGaming,” and a 13.75% tax rate on sports betting.
The agreement gives the Connecticut Lottery Corp. the right to operate 15 retail sports betting sites and operate an online sports betting skin, or brand.
The lottery will have the right to sublicense some of those locations to Sportech, the state-licensed pari-mutuel operator, marking a break from the state’s 30-year relationship with the tribes that gave them exclusive gambling rights in Connecticut.
License agreements will extend 10 years with a five-year extension option. The lottery also will establish new retail sports betting venues in Hartford and Bridgeport.
Sportech said Lamont promised a year ago to “seek a fair resolution regarding gaming expansion involving existing gaming operators that ‘must be designed to avoid and withstand endless legal challenges.'”
“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,” the company said.
In announcing the agreement, Lamont said it “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.”
And it will make Connecticut competitive with other states that offer sports betting and internet gambling, the governor said. Chairman James Gessner Jr. of the Mohegan Tribe, which operates the Mohegan Sun, said improved competitiveness as a result of the agreement will help expand Connecticut’s economy.
Rodney Butler, Mashantucket Pequot Tribal chairman, said Lamont’s announcement of the agreement with only one of the two tribal nations that was a party to the negotiations is offensive.
“We have participated in these discussions in good faith and consider today’s events extremely disrespectful in terms of process and substance,” he said.
Without elaborating, Butler said the Mashantucket Pequots have one remaining “point of contention that is easily resolved if some sense of mutual respect is afforded for the specific needs of our tribal community.”
The agreement included “significant and substantial concessions made by both tribes,” he said.
“Just permitting Lottery to participate in full sports betting, absent tax or revenue share, is a major allowance,” Butler said.
Earlier, he told reporters that both tribes are substantially in agreement.
“I can assure you we’re in solidarity with our Mohegan cousins on this,” he said. “We are so close. We are down to one final point and when we get there this is going to be a great deal for everyone.”
A 20% tax on iGaming was opposed by the Mashantucket Pequots, but supported by the Mohegans.
The U.S. Department of Interior must review revised regulations, which could take 60 to 90 days, and the state Department of Consumer Protection would rewrite regulations, he said.
The General Assembly also must approve the deal.
Butler said new revenue for the state would be close to $70 million, which will be even greater as the casinos bring in more visitors tied to iGaming, he told reporters. Sports betting and iGaming, not including iLottery and Keno, would generate $40 million to $50 million for the state. Using the 25% share of slot revenue claimed by the state and assuming it’s not changed in a new agreement, total revenue for the two new online platforms would be $200 million.
“We think it’ll be a decent-sized market. We don’t see it eclipsing retail gaming anytime soon or in the distant future,” Butler said.
Stephen Singer can be reached at ssinger@courant.com.
