Connecticut Governor Wants Online Gaming as Bargaining Chip in Tribal Sports Betting Negotiations

Connecticut’s efforts to fast-track sports betting legislation at a forthcoming special session are going to require some negotiating with the states two tribal casino operators. Governor Dannel Malloy believes the state’s hand will be strengthened if it includes regulated online gaming in its plans.

Connecticut Governor Dannel Malloy believes Connecticut should legalize online gaming during a forthcoming special session, as well as sports betting. He is preparing to enter compact negotiations with the state’s two tribal casino operators. (Image: Chion Wolf/WNPR)

The Mashantucket Pequot and Mohegans are the only entities authorized to operate casinos in Connecticut and will have the right to offer sports betting at their respective Foxwoods and Mohegan Sun properties if it’s legalized in the state.

The question is, will that be the exclusive right?

The tribes and so falls under their duopoly, pointing to the fact that sports books in Nevada are exclusive to casinos. Lawmakers are skeptical of this argument, emphasizing that when exclusivity compacts were negotiated with the state in the early 1990s, sports betting was never mentioned.

Meanwhile, Connecticut Attorney General George Jepsen has opined that the question of whether sports betting is a casino game is wide open.

Will Connecticut Be the Fifth State to Regulate Online Gaming?

Malloy has said all his negotiations with the tribes will be done in concurrence with the legislature. On Wednesday, he met with lawmakers to lay the groundwork for negotiations and to discuss the nature of the legislation that will be presented at the special session. He also wanted to know whether Connecticut would also try to legalize online gaming.

I need to know whether it’s the intention to include in-state, online gaming, because it would make sense to negotiate those things in one negotiation as opposed to two negotiations,” said Malloy, as reported by the Connecticut Mirror. “And I think, quite frankly, doing them together makes it more likely we would reach agreements with the two tribal nations.”

Malloy is in a strong position as he enters negotiations. Tribal gaming operators’ standard reaction when they feel menaced by any kind of commercial gaming expansion is to threaten to withhold revenue payments, alleging compact violation.

Tribes Backed into Corner

Revenue-share payments are a big deal to Connecticut worth some $250 million per year but the moment the tribe’s stop making payments is the moment they lose their most powerful tool in the battle to prevent MGM from opening a

Malloy is not an enthusiastic proponent of gambling expansion, but following the Supreme Court’s rejection of PASPA he has shown himself to be a pragmatic realist.

“You’re asking questions about how you will prevent that which we already have been unable to prevent in the past,” he told lawmakers on Wednesday. “I think the right way to ask this question is how do we build the best system and the fairest system that allows for gaming, which now is going to become more common nationally than it has in the past.”

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