In 2019, the first full year of legalized sports betting since the invalidation of a federal law banning its legalization, approximately $ 13 billion was staked in 11 states.
This is still just a fraction of the total made largely illegally by offshore sports betting and bookmakers, valued by the American Gaming Association at $ 150 billion.
While it is difficult to quantify the amount of money that Connecticut spends on sports, it is easy to calculate the tax revenue the state will receive for it: $ 0. Legislators can and should address this issue at this session by legalizing in-person and online sports betting
With two large tribal casinos, off-track betting, and a state lottery, sports betting in Connecticut isn't illegal due to our puritanical history or concerns about gambling addiction. Rather, it is part of the intransigence and complexity of the legislation – or at least the confusion – that surrounds the Mohegan and Mashantucket Pequot tribal gaming packages and the pressures of the tribes themselves.
In this year's state speech, Governor Lamont said we shouldn't "sell legalized marijuana, sports betting, and internet gaming to extra-state markets, or worse, underground markets." He called for sports betting to be legalized in 2018 during his campaign and before the two previous legislative terms. New Jersey, New York, New Hampshire, Pennsylvania, and Rhode Island have already legalized sports betting.
As part of gaming compacts, the Mohegan and Mashantucket Pequot tribes have exclusive rights to operate casinos in the state. In return for a quarter of the casino's gross slot machine revenue, the state will not allow anyone to play "video facsimiles or other commercial casino games."
Sports betting is not mentioned. The tribes stated that they view "commercial casino games" as sports betting. In a written testimony before the Legislature's Public Safety Committee last year, sports games attorney and professor Daniel Wallach opined that sports betting is not a casino game, a position shared by several attorneys general and supported by federal law.
Still, the tribes will likely litigate any attempt to legalize sports betting with no guarantee of exclusivity or other favorable treatment. The Mashantucket Pequot tribe have also threatened to withhold their slot payments to the state. So far there is a submitted bill that would legalize sports betting, but only in the existing casinos. This would likely be questioned by off-track betting shops and other businesses looking to join the promotion.
The driving force behind the legalization of sports betting is money. Everyone wants it. Players want their bets to win, bookmakers and sports betting want to collect, and governments want their share of taxes and royalties. The revenue would benefit the state. The casinos, whose revenues have declined due to the pandemic, would also benefit from it without exclusivity. It's time to make a deal. To do this, sports betting must be legalized.
Lamont and the tribes have been idle for two years. Since sports betting is still illegal, Lamont has minimal leverage. Legislators can give them more by having a bill they can sign. Negotiations can continue while the regulatory and licensing systems are in place.
New Jersey generated approximately $ 36 million in sports betting revenue in 2019 and $ 28 million in revenue for the first three quarters of 2020 despite the fact that the sports season was cut short due to the pandemic. Rhode Island has made more than $ 20 million in sports betting taxes since its legalization in 2019.
The tax revenue Connecticut would generate would not be enough to solve all of our budget problems, but it is better than increasing existing taxes. Legalizing sports betting is a bet that the state really cannot lose.
Christopher DeMatteo is an attorney at DeMatteo Legal Solutions based in West Haven.