State Could Allow Online Gambling And Lottery Ticket Sales
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A U.S. Justice Department ruling issued last week clears the way for the introduction of online lottery ticket sales and online gaming in Connecticut and other states. (KAREN BLEIER/AFP/GETTY IMAGES)
A U.S. Justice Department ruling issued late last week clears the way for the introduction of online lottery ticket sales and online gaming in Connecticut and other states.
Dannel P. Malloy said Wednesday in an interview with The Courant.
Malloy, who has been outspoken about the need to increase state gambling revenue, welcomed the ruling, which clarifies the federal government's stance on in-state online gambling and opens doors that would allow Connecticut to remain competitive in a region where gambling options are multiplying.
"Obviously, gaming is an important part of our economy," Malloy said. "… It appears that the only thing the Justice Department has ruled is off the table is sports betting, with the exception of horse betting. So with that one exclusion, everything is up for consideration by the states."
To remain competitive, he said, the state must consider a plan that includes online gaming or risk losing revenue to other states.
With competition looming across all borders, online gaming in Connecticut might be one way to plug some of the losses that the state's two casinos are expected to experience when Massachusetts' casinos open.
After a four-year struggle, Massachusetts lawmakers last month legalized casino gaming. The law allows for the establishment of a single slots parlor anywhere in the state, and three full-scale casinos, one each in the Boston area, and the southeastern and western parts of the state.
Although experts say it will be two or three years before the first Bay State casino opens, the drain of customers and dollars from Connecticut's tribal casinos could mean a 15 percent to 20 percent tumble in revenue for them.
The decline would cut the state's revenue, too, because each month, Foxwoods Resort casino in Mashantucket and Mohegan Sun casino in Uncasville pay 25 percent of their slot revenue to the state's general fund. This past year, those revenues averaged about $15 million per casino per month.
The Mashantucket Pequot tribe, which owns Foxwoods, and the Mohegan Tribe, which owns Mohegan Sun, have been following the online gaming question since it was brought before the Justice Department in late 2009 by officials of the Illinois and New York state lotteries. Specifically, lottery officials asked the Justice Department to determine whether Internet lottery ticket sales would violate the 1961 Wire Act, intended to prevent interstate sports betting.
"Because the … lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not prohibit them," U.S. Assistant Attorney General Virginia Seitz wrote, summarizing the Justice Department's finding.
The decision allows Illinois and New York to proceed with plans to use the Internet to sell in-state lottery tickets. It also gives state lawmakers the ability to explore expanded gambling options in the upcoming legislative session.
"It clears the road for different types of gaming and participating in gaming" Malloy said.
Europe has embraced online gambling, said Chuck Bunnell, a spokesman for the Mohegan Tribe.
"This is something we've been watching. We've been anticipating that the United States would move into this arena," Bunnell said.
Bunnell said the Mohegans have had numerous meetings with the Malloy administration to discuss "how to remain competitive in an ever-expanding gaming environment."
"The Justice Department has made the path clearer for us," he said.
In Connecticut, the two tribes have exclusive rights to offer casino games. So Internet gaming could have "something online that's run by one or both tribes," Bunnell said.
"We have been watching the Internet gambling issue closely and there is no question that the Justice Department opinion is a positive development in an area of business growth that, except in horse racing, is largely untapped," Foxwoods officials said Wednesday in a prepared statement. "We're studying the opinion to determine how it might impact our business strategies for both the near and longer term."
State lawmakers weighed in with a mix of reactions.
Rep. Jason Rojas, D-East Hartford and House vice chairman of the legislature's finance, revenue and bonding committee, said the concept of increased online gaming, and the additional revenue it could bring is "certainly intriguing."
But, he added, "we have to think through all the potential outcomes.''
Besides dealing with the problems of chronic gambling, Rojas said he would want to ensure that additional gaming options would not hurt the state's casinos, which contribute millions of dollars to state coffers and employ thousands of residents.
"Is it a revenue-neutral item if we get new revenue in one area and lose it in the casinos?" he asked.
Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, was cool toward the idea of online wagering.
"While I have never been a fan of the expansion of gambling, I am willing to listen to proposals,'' he said Wednesday in an email. "However, it is my I hope we could find other means to increase revenues or produce savings."
Opposition to online gambling cuts across party lines. State Sen. John McKinney, the chamber's Republican leader, said he, too, is "not a big fan" of expanded gambling in the state, especially online gambling.
"While people should be free to make their own choices, the evidence is that expanded gambling leads to additional societal problems,'' said McKinney, of Fairfield. "It is not a sound foundation for future economic growth.''
McKinney, who said he has yet to discuss the issue with his caucus, said gaming income is not a predictable source of revenue. "Gambling in general has not proven to be a panacea,'' he said. "You don't need to look much further than Atlantic City.''
"We shouldn't ignore the fact that there are people in our society who end up having gambling addictions ... and other problems as well,'' McKinney said.
Through the Department of Mental Health and Addiction Services, the state runs the Problem Gambling Services program, which is funded by the Connecticut lottery. The program receives about $1.9 million a year.
The specter of Internet gambling has Marvin Steinberg, executive director of the Connecticut Council on Problem Gambling, a nonprofit group, concerned that online gambling could add to the number of problem gamblers in the state.
"We're not opposed to legalized gambling, but we're concerned for society with the amount of gambling that keeps coming along."
A 2009 study found that about 3 percent of the state's adult population has a problem with gambling, said Steinberg, who said he believes the rate is closer to 5 percent based on additional information gathered by his group, which receives the majority of its funding from Connecticut's two casinos and the state.
"There's no question that the states will take the Justice Department ruling as a green light to go ahead with online gambling," he said. "It's no surprise the governor is thinking of capitalizing on that. … In the last few years, the competition across state lines has been really enormous. If neighboring states have this form of gambling then it's likely we'll have to have it, too.
"My concern is that the states, including Connecticut, may be oblivious to the need for monies … for prevention and treatment of problem gambling. You have to address the social costs beforehand … within the legislation. If we're thinking about new forms of gambling, then put prevention and study and help for problem gambling in the bill."
Courant staff reporter Daniela Altimari contributed to this story.