Sports Betting and Online Gaming Up For Discussion

HARTFORD, CT — Gov. Dannel P. Malloy met with legislative leaders Wednesday and asked for their input on whether he should negotiate both sports betting and online, in-state gaming with the two tribal nations.

Earlier this month the Supreme Court struck down a 1992 law that barred most states from legalizing sports betting. Unable to pass legislation before May 9, the General Assembly and Malloy are now trying to figure out what it would look like in Connecticut.

Connecticut’s situation is unique in that it has two federally recognized tribes that essentially have the exclusivity over gaming in the state. They share slot revenue with the state through a compact that was first negotiated by former Gov. Lowell P. Weicker.

Malloy and legislative leaders agree as governor he has the executive authority to negotiate the compacts with the tribes. But it’s likely he will also need enabling legislation to move forward with sports betting and online gaming.

“If we were to move forward without a compact then we would endanger the revenue we already receive from the tribes, so negotiating a compact by its nature is an executive function,” Malloy said. “Adoption of laws in how that compact would play out is a legislative function.”

How many entities aside from the tribes will receive revenue from sports betting? Will it include the off-track-betting facilities or will it be much broader? Will residents be able to bet on sports where they are able to buy a Connecticut Lottery ticket? Or will it be as simple as downloading an app onto a cellphone?

“That’s very much an open question,” Malloy said.

Unwilling to give away his negotiating strategy, Malloy said he’s asked lawmakers how much they want him to negotiate.

He said there’s a line of income from the two tribes from slot machine revenue and the state doesn’t want to give it up.

“It’s very complicated,” Malloy said.

He said he’s confident that if the decision is to proceed with sports betting and online gaming then “an agreement can be reached” with the tribes.

Attorney General George Jepsen, in an opinion released last month, said legalizing sports betting would not affect the existing gaming arrangements with the tribes.

“Sports betting is not listed as an authorized game,” Jepsen said. “By contrast, for example, pari-mutuel betting on horse and dog racing and jai alai games are authorized games. The exclusion of sports betting from the specific list of authorized games is compelling evidence that the Compacts do not presently authorize it.”

Currently, the state and the tribes have a compact in which the state receives 25 percent of slot revenue in exchange for exclusive casino rights.

In order to move forward, Malloy said they have to reach an agreement with the tribes.

“We have to make sure we don’t put our existing revenue stream at risk,” Malloy added.

He said adding online gaming to the discussion makes it more likely a comprehensive agreement can be reached.

Legislative leaders said they would have their own discussions to see if they could offer Malloy any advice on the negotiations with the Mashantucket Pequot and Mohegan Tribal Nations.

“We want to have communication with him next week before he begins those negotiations,” Senate President Martin Looney, D-New Haven, said.

Senate Republican President Len Fasano, R-North Haven, said he believes this would be a separate memorandum of understanding with the tribes that’s unrelated to the slot revenue sharing agreements they already have.

Looney said whatever Malloy negotiates with the tribes will need to be submitted to the Bureau of Indian Affairs, which has yet to approve an amendment to Connecticut’s gaming compact to allow a casino in East Windsor to move forward.

It’s unclear what would happen in Washington D.C. with the submission of another change to the compact.