While most of the attention for expanding revenue in the state has centered on casinos and tolls, the legislative committee that cleared the first hurdle for a competitive casino process last week also narrowly approved Sports Wagering Bill HB 5307 which requires “the Commissioner of Consumer Protection to adopt regulations to regulate sports wagering when federal law is enacted or repealed or a federal court decision is issued that affirms the authority of a state to regulate sports wagering.” See bill here. The bill still requires action of the full State House and Senate. OIB friend Tom Kelly submitted written testimony to the Public Safety Committee on behalf of Shoreline Star, a parimutuel in Bridgeport.
I attended the full informational hearing on March 2, 2018. I was impressed by the detailed testimony of the experts and the pointed questions put forth by your committee members. Distribution will be the key if this legislation is eventually brought to market. It will require a multichannel state-wide retail brick and mortar provider coupled with an online-distribution platform in place.
It is my belief that we already have a seasoned provider in Sportech. They are already state licensed, publicly traded, headquartered in New Haven with their exclusive pari-mutuel platforms already in place. They possess a Know Your Customer (KYC) program and have an Automatic Deposit Wagering (ADW) program that they utilize in their existing racing business. These programs were discussed in detail at last week’s info forum.
I have witnessed first-hand Sportech’s substantial capital improvements that they have made over the last several years. In the last decade they have spent almost one-hundred million dollars in capital improvements to grow their business. It is no longer your Grandfather’s OTB parlor. Their business relationship with Connecticut Sport Legend Bobby Valentine in Stamford and Windsor Locks is further proof of their commitment to growing jobs and creating greater revenues for our state. The new gamer will be a sophisticated player utilizing quantitative data analysis to place their straight bet, parlay and proposition wagers. Technology changes at the speed of light and eventually you will see augmented reality playing into these wagers.
In a nascent business model it will require patience to grow, educate and mature the business and revenues. The Legislature in your wisdom granted an additional six licenses to Sportech for a total of twenty four that could provide the state with a turnkey sports wagering solution.
In 1993, Sportech’s predecessor, Scientific Games, paid the state of Connecticut twenty million dollars for the exclusive rights of pari-mutuel wagering in Connecticut. When those rights were garnered “Bookmaking” was illegal and is part of the language included in their purchase. If that prohibition is ended then it should become a permitted use under that exclusive agreement. Additionally, the State should not have to implement a 1% integrity fee as recommended by the NBA and MLB lawyers. It is a money grab by the leagues no matter what term they would like to use.
When I was boy growing up in the Greater New York Area the mafia controlled illegal gambling from sports betting to a daily number. The daily number was a fact of life, a modest wager for the unsophisticated gambler. It was also a very profitable game.
Sports betting has always been big money. Frank “Lefty” Rosenthal, the odds maker that ran Las Vegas casinos for the Chicago Outfit in the ’60s (Martin Scorsese’s film “Casino” was based on his story) saw betting parlors all over Las Vegas making millions of dollars. He opened betting parlors in the Stardust, Fremont, Marina, and the Hacienda, the casinos he oversaw, increased casino revenueand put the independents out of business. New York, New Jersey, Connecticut, Massachusetts and other lottery states expanded games to include daily 3- and 4-digit drawings which cut into on of organized crime’s oldest profit makers. (Earlier the mobs lost out to legal off track betting.)
Sports betting is the last frontier in legalized gambling. The revenue is enormous. The underworld reaps billions of dollars in untaxed income from illegal ports books. Virtually eery dive bar in the city of Bridgeport has a seasonal betting pool for football, basketball, baseball, hockey… Christ, there are probably curling pools in the taverns of Minnesota, Michigan and Wisconsin.