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Connecticut Governor Backs Up Legalizing Sports Betting in His 2021 State of the State Address

Article by : Helen Jan 19, 2021

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It looks like Connecticut is racing to become the next state to legalize sports wagering – at least, if Governor Lamont’s 2021 State of the State Address is anything to go by.

In the address, Gov. Lamont said, “I am working with our neighboring states and look forward to working with our tribal partners on a path forward to modernize gaming in our state, as well as the legislature on legalization of marijuana. Sports betting, internet gaming, and legalized marijuana are happening worldwide. Let’s not surrender these opportunities to out-of-state markets or even worse, underground markets.”

The urge to legalize sports wagering and online gambling is hardly surprising: according to Sen. Kevin Kelly, the state is facing an estimated $4 billion in budget deficit this year. Doing this, along with making recreational marijuana legal, will generate taxes that will become the oh-so-needed new budget revenues.

For now, Connecticut has two-decades-old Compacts (agreements, in other words) signed with Native American tribes that allow them to run sports betting activities. As for the private sector, sports wagering remains off-limits for the time being – and the tribes would prefer to keep it that way. They went as far as threatening not to pay $250 million in slot revenue, saying that they consider sports wagering their “exclusive right.”

Connecticut isn’t the only state whose governor is seeking to legalize sports betting amidst the economic crisis induced by the COVID-19 pandemic. On January 6, New York Governor Andrew Cuomo also announced authorizing sports wagering under his 2021 State of the State.

“At a time when New York faces a historic budget deficit due to the COVID-19 pandemic, the current online sports wagering structure incentivizes a large segment of New York residents to travel out of state to make online sports wagers or continue to patronize black markets,” Governor Cuomo explained during the announcement. “New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting, we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.”

Legalizing sports betting in the whole state of New York is one way to somewhat balance out the estimated $50 billion budget deficit it is now facing in 2021. (For now, sports betting in the state is allowed only in four upstate venues and Native American properties.)

The demand is there, for sure – New Jersey reported that an estimated 20% of its revenues from sports wagering is brought in by New York residents, as Gov. Cuomo highlighted in his announcement.

According to State Budget Director Robert Mujica, the governor’s proposal means an estimated additional $500 million to close the budget gap. Under the proposal, sports betting will be run by the state’s Lottery, not private companies (in this case, New York would expect only $50 million in tax revenues – ten times less than under Cuomo’s plan).

Sports betting is still a very young industry in the U.S.: the path for it was cleared only in 2018 by the Supreme Court’s decision in the Murphy v. NCAA case. That ruling overturned a federal law that kept most states from amending the state law to legalize the activity.

So far, 14 U.S. states have taken advantage of that development and added sports betting to the list of legal (and, therefore, taxable) business activities. We’ll have to wait and see whether Connecticut will beat New York in becoming the 15th state on the list.