The First Connecticut Sports Bet: Substance Vs. Semantics

• Connecticut Tribal authorities aren’t budging on their claim of sports betting exclusivity rights.
• Hundreds of millions of dollars are at stake as the Mashantucket Pequot and Mohegan Nations threaten to withhold MOU payments.

HARTFORD, Conn. – Sports betting legalization in Connecticut continues to be a contentious issue, pitting the state’s interests, commercial interests, and tribal interests against one another. Currently, the argument about what constitutes “sports betting” has centered around the semantics of “casino gaming.”

If sports betting is regarded as a “casino game,” the two Connecticut tribes – the Mashantucket Pequot Tribal Nation (operators of Foxwoods Resort Casino) and the Mohegan Tribe (Mohegan Sun) – claim that this gives them exclusive rights to offer the pastime.

Both tribes have compacts and MOUs (memorandums of understanding) with the state of Connecticut, which give them sole authority to operate all casino gaming in the state. Of course, there is a dispute about whether or not sports wagering constitutes casino gaming as a matter of course.

According to tribal authorities, it clearly does. George Henningsen, Foxwoods’ tribal gaming commission chairman, explains that when Connecticut and the tribes signed these compacts and MOUs, sports wagering was only legally available at Nevada-area casinos. As such, logic dictates that the pastime is a casino game.

The State Disagrees

Naturally, the state disagrees with this interpretation, explaining that “casino game” is not specifically defined in the tribal MOUs. This means that such implied sports betting exclusivity is inappropriate. Connecticut Representative J.P. Sredzinski (R-Monroe) said in a committee hearing on Tuesday that he believes the tribes are taking advantage of the state.

“To not have a definition for a casino game but then say sports wagering is a casino game so we need exclusivity to that just flies in the face of common sense to me.”

Interpretations might be unnecessary, and they may not be the most effective tack the state has to pursue its stance that sports betting is not a “casino game” per the tribal compacts.

No Sports Betting In Connecticut Tribal Compacts

The wrangling about definitions and semantics and the “spirit” of the law and suchlike might be the wrong course to take in this matter. This is because all three classes of tribal casino gaming are explicitly defined per the state compacts.

Sports betting is not a part of Class I or Class II gaming, though it could be a part of Class III gaming (as it is in New Mexico, for example). Unfortunately for the Mashantucket Pequot and Mohegan tribes, their compacts (available here and here) with Connecticut explicitly define the games covered by “Class III gaming,” and the tribal venues are not empowered to offer more than what the document prescribes.

Section 3 of the tribal compact in use specifically enumerates what constitutes “Authorized Class III Gaming,” stating in no uncertain terms that “The Tribe may conduct, only within the Reservation, and subject to the terms and conditions of this Compact, any or all of the following.”

In the list of approved activities, 23 such “approved” Class III games are specifically listed by name. Sports betting is not included. Further, as if to hammer home the point, § 3(d) of these compacts define “Prohibited Class III Gaming,” stating clearly that the tribes “may not conduct any form of Class III gaming which is not expressly enumerated in section 3(a).”

The Tribes Hold The Purse Strings

Despite the above, the Mashantucket Pequot and Mohegan tribes are content to play their trump card, as they hold the ultimate power of the purse. Between the two tribes, they pay the state government a minimum of $160 million per year (25% of video facsimile gaming revenue).

Per the MOUs (available here), if there is any change in state law that allows any other entity to operate “other commercial casino games,” the tribes “shall not be bound by the provisions of” the MOUs.

Or Do They?

While the tribes seem to have leverage here, given their massive yearly contributions to the Connecticut state government, they might not actually be positioned quite so well.

If the tribes decide that the state, in granting sports wagering to non-tribal entities, is in violation of the MOUs, they are empowered to cease paying out the big bucks to the state.

In doing so, however, they will summarily lose their rights to operate – exclusively or otherwise – these extremely profitable video facsimile machines.

It is unclear how far the Mashantucket Pequot and Mohegan Nations are willing to take this gambit, but both sides have bargaining power here. As a result, it seems likely that a resolution – rather than a protracted legal battle – will be the likely outcome. And that should happen sooner rather than later.