Connecticut Reaches iGaming Deal with Tribal Operators
The state of Connecticut, the Mohegan Sun, and Foxwoods have reached a deal regarding online gaming and sports betting.
It seems that online gambling might be coming to Connecticut sooner rather than later. After a long negotiation process, officials have now signed a deal with the Mohegan Sun and Foxwoods, to start offering online gaming and sports betting services. Negotiations were ongoing for months, but this week, Governor Ned Lamont announced that the Mashantucket Pequot Tribal Nation and the Mohegan Tribe are approved to launch online services.
Details of the Deals
Now that the negotiations have ended, let’s take a look at the details of the deals. The gross gaming revenue from the online casino operations of both tribes will be taxed at 18%. This tax rate will be in place for five years. After that, the rate goes up to 20%. For sports betting service, both retail and online options will be taxed at a lower 13.75%.
The tribes will not have a monopoly when it comes to sports betting. The state Lottery will be allowed to approve 15 retail locations and online sports betting skins. This will create a more competitive market in the state.
The agreement with the tribes is valid for 10 years. It includes an option to extend the agreement for five more years. As part of the deal, the tribes must stop their join project to create a satellite casino in the East Windsor area.
Helping the State
Governor Lamont was excited to share the news of the gaming expansion approval. With sports betting and iGaming now on offer, the state can expect to earn tens of millions in tax revenues. The gaming industry will also be more competitive with neighboring states, which is a long-term benefit. The state will not be at risk of falling behind now that it will launch these services sooner rather than later.
Lamont stated that a good agreement was reached, and it will allow the tribes to grow and prosper. The activity is something that neighboring states are doing and ‘Connecticut is going to play’. The governor feels that the new gaming options will help to bring cities and towns back to live, providing real revenue for taxpayers.
Even though the tribes and the governor have signed a deal, it is not a finished agreement yet. The General Assembly must now approve the details. If the compact gets the go-ahead, it will then need to be reviewed by the United States Department of the Interior. The Class III gaming compacts will need to be considered and once the department provides approval, then the new gaming options can start.
The deal comes at a time when the two tribes have been struggling with their land-based venues. Both the Mohegan Sun and Foxwoods have experienced declines in revenue earnings for more than a decade. The main problem has been nearby competition in other states.
By adding in online options and sports betting services, players are more likely to stay in the state to wager instead of visiting other venues across state lines. Today, neighboring states like New York, Rhode Island, and Massachusetts all offer casino gaming, which has harmed the two tribal venues.
The MGM Resorts Springfield casino has made the biggest negative impact. This venue is located just a few miles from the Connecticut state line. It provides a closer gaming option for several areas of the state. However, with online gaming launching, players will be able to stay inside Connecticut and play slots and table games, without spending any funds to travel.
The two tribes are hoping that this is the decision that players will make once they get online gaming services started. The revenues earned would certainly shore up the loss from the land-based venues and help to see some recovery since the onset of the COVID-19 pandemic.