Foxwoods Supports Legalized iGaming in ConnecticutMarch 21, 2018 11:16 am
Connecticut was not initially viewed as one of the states most likely to legalize internet gambling in 2018. Following a public hearing on March 15th, however, that may be all about to change with both tribal interests and legislators alike expressing their support for a regulated online gambling and sports betting industry.
Foxwoods Offers Support
There are currently just two casinos in Connecticut, both of which are tribal owned, namely the Mohegan Sun located in Uncasville, and Foxwoods Resort and Casino in Mashantucket. At the recent hearing that took place, Foxwoods Resort Casino subsequently fiercely expressed its support for online gambling and sports betting in a testimony provided by the Mashantucket Pequot Tribal Nation owned casino.
During the Public Safety and Security Committee Hearing, seven bills on a range of issues from commercial casino gambling to online gaming and sports betting were discussed, with Foxwoods making it clear that it not only fully supported legislation, but ultimately saw iGaming as one of the best opportunities for the state.
On March 15th, Seth Young, Executive Director of Online Gaming at Foxwoods Resort Casino, provided the greatest amount of support at the hearing for regulated online gambling, including online slots, table games, and poker games via mobile devices or desktops.
During his testimony, Seth Young cited the positive example provided by New Jersey and mentioned that since launching its regulated iGaming market at the end of 2013, the Garden State has received over $126 million in tax revenue. Young then went on to explain that providing a pragmatic tax rate was introduced Connecticut could expect to collect $87 million in iGaming tax revenues over a five year period, starting at $14.25 million in Year One, rising to around $20 million by Year Five.
NJ a Shinning Example
Amongst the points the Foxwoods Executive Director used to support his testimony was the fact that New Jersey’s online gaming industry rather than cannibalizing its land-based operations, as many had suggested, has instead contributed to the overall revival of Atlantic City. In 2016, Atlantic City casinos actually recorded an increase in its revenue following a decade of decline, with the trend continuing into 2017, despite the high levels of competition coming from nearby states.
Today, online gambling in New Jersey accounts for around 10% of all gambling revenues in the state, with the industry having added an extra 3,374 jobs since 2013. Furthermore, technology has advanced far enough to ensure all customers are located within state borders, while there have also been no examples of minors accessing online gaming sites on account of the “Know Your Customer” checks which are being used.
$127 Million Over 5 Years
After also laying out the benefits of sports betting in Connecticut, pending a successful outcome in New Jersey’s of PASPA challenge in the US Supreme Court, of course, Young then provided his assessment on how much the combined industry could be worth to the state.
“With iGaming and sports gambling operated together by the Tribes, we project Connecticut will collect tax revenues of $20.8 million in Year One, escalating to $29 million in Year Five, for a total of $127.7 million in projected new tax revenues over five years. We are comfortable standing behind these projections and are comfortable stating that you can book this revenue into the budget for the 2018-2019 fiscal year if we are legally authorized to get both programs up and running.”
Counter to Increased Competition
The Indian Regulatory Gaming Act was introduced in 1988, after which the Mashantucket Pequot Tribe became the first tribe to operate a casino in Connecticut, with the Foxwoods Resort Casino opening its doors for business in 1992. Back then competition was sparse, but these days casinos have been springing up all across the region in neighboring states, making it even more important that Conneticut modernizes its approach to the industry, appeals to millennials, and ultimately recaptures revenues that may be leaving the state.
Casino Shake-Up Required
Connecticut’s brick-and-mortar casino industry has seen its business decline dramatically since generating record slots revenue in 2006. That year, Foxwoods collected $204 million in slots revenues, and Mohegan Sun a further $229 million, but since then revenues have declined dramatically with Foxwoods generating $117 million last year, and Mohegan Sun $152 million.
Just like Atlantic City, Young has strongly suggested that the introduction of regulated online gambling in Connecticut may help the state to revitalize its declining land-based casino market.