OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-570
AN ACT AUTHORIZING A TRIBAL RESORT -CASINO IN
BRIDGEPORT, SPORTS WAGERING, ONLINE CASINO GAMING
AND ONLINE LOTTERY.
Primary Analyst: CW 4/12/21
Contributing Analyst(s): DD, ME, JS
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $
Connecticut Lottery Corporation Lottery Enterprise
Fund - Potential
Cost
14.6-19.6
million
14.6-19.6
million
Consumer Protection, Dept. State Sports
Wagering and
Online Gaming
Regulatory Fund -
Potential Cost
Up to 2.4
million
Up to 2.2
million
Consumer Protection, Dept. State Sports
Wagering and
Online Gaming
Regulatory Fund -
Potential Revenue
Gain
Up to 2.4
million
Up to 2.2
million
Resources of the General Fund GF - Potential
Revenue Gain
See Below See Below
Board of Regents for Higher
Education
GF - Potential
Revenue Gain
See Below See Below
Department of Economic &
Community Development
GF- Statewide
Tourism
Marketing
Account -
Potential Revenue
Gain
See Below See Below
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 22 $ FY 23 $
Various Municipalities See Below See Below See Below 2021SB-00570-R000396-FN.DOCX Page 2 of 5
Explanation
The bill, which legalizes and regulates expanded gaming in the
state, results in the following fiscal impacts:
1
Potential Revenue Impacts
Sections 3-5, 8, 27, and 30 authorize sports wagering which results
in a potential General Fund revenue gain of up to $19.3 million in FY
22 and $21.1 million in FY 23.
2
It is estimated that annual potential
General Fund revenues could grow to $24.8 million by FY 26.
Section 8 also requires 10% of the tribes’ payments from the online
sports wagering they operate outside of Indian lands or $20 million,
whichever is less, be transferred from the General Fund each fiscal
year to the statewide tourism marketing account. This results in a
potential revenue gain to the statewide tourism marketing account as
early as FY 22.
Section 3 authorizes online casino gaming by the tribes which
results in a potential General Fund revenue gain of up to $8.6 million
in FY 22 and $11.4 million in FY 23. It is estimated that annual
potential General Fund revenues could grow to $28.1 million by FY 26.
Sections 4, 18, and 21 authorize online keno by the Connecticut
Lottery Corporation (CLC) which results in a potential revenue gain to
the "debt free community college account" within the General Fund
(created by the bill) of up to $0.7 million in FY 22 and $0.9 million in
1
The bill's provisions are subject to several conditions, including that the governor
must first enter into specific contractual agreements with the Mashantucket Pequot
and Mohegan tribes, which must then be approved or deemed approved by the U.S.
Department of Interior secretary, pursuant to the federal Indian Gaming Regulatory
Act and its implementing regulations. Consequently, all impacts are potential in
nature.
2
Under the bill, the CLC is subject to the same 13.75% tax on gross gaming revenue
from sports betting that applies to the tribes. However, it is unclear what effect this
would have as the CLC transfers all net revenue to the General Fund after paying all
agency expenses (which presumably would include this tax). 2021SB-00570-R000396-FN.DOCX Page 3 of 5
FY 23. It is estimated that annual potential revenues could grow to
$2.1 million by FY 26.
Sections 4 and 22 authorize online lottery draw games by the CLC
which results in a potential revenue gain to the "debt free community
college account" within the General Fund of up to $2 million in FY 22
and $3 million in FY 23. It is estimated that annual potential revenues
could grow to $19 million by FY 26.
Section 16 allows the Department of Consumer Protection (DCP) to
regulate and issue licenses to operate fantasy contests outside of Indian
lands if the State-Tribal agreement goes into effect resulting in a
potential revenue gain to the extent these licenses are applied for and
violations occur which result in fines.
Sections 19 and 20 result in a potential General Fund revenue gain
to the Board of Regents. The amount of the potential revenue gain will
be equal to the revenues from the online lottery program (less program
expenses), if it is authorized. Section 19 requires the CLC to establish
a fund to receive all online lottery draw game revenues. This fund
would be used to pay all online lottery draw game expenses and to
defray the costs of the existing debt-free community college program,
which provides grants to eligible students. A dedicated, nonlapsing
debt-free community college account within the General Fund is
established by Section 20 of the bill to receive the funds from the CLC
online lottery draw game account. Account funds must be expended
by the Board of Regents for the debt-free community college program,
which is anticipated to cost the Board of Regents approximately $13.9
million in FY 22 and $15 million in FY 23, if program enrollment is
uncapped.
Section 39 requires, beginning in FY 22, a General Fund transfer to
the Mashantucket Pequot and Mohegan Fund (MPMF) of $137 million
to be distributed according to current MPMF statute. This reduces the
revenue available to the General Fund by $86 million annually
beginning in FY 22, and results in a corresponding revenue gain to
municipalities. 2021SB-00570-R000396-FN.DOCX Page 4 of 5
Sections 36 and 37 expand allowable hours of alcohol sales at
casinos, which results in an estimated General Fund revenue gain of
up to $2 million on an annualized basis from additional slot revenues.
Potential Cost Impacts
Sections 4 and 5 allow the CLC to offer mobile and retail sports
betting, online keno, and online lottery draw games resulting in a
potential cost of $14.6-$19.6 million per year. To meet the
requirements of the bill the CLC will need to hire approximately 20
new employees ($3.3 million cost for salary and fringe benefits) who
will cover marketing, finance, IT, and security for sports betting and
the new lottery games being offered.
The CLC will also need to partner with vendors (estimated $11.3-
$16.3 million cost per year) to provide gaming systems and platforms,
player account management systems, audit and regulatory expenses,
and marketing services. The exact cost will depend upon the contracts
between the CLC and the vendors.
Section 9 requires the DCP to assess the tribes and any authorized
operator of sports wagering for the regulatory costs the department
will incur resulting in a revenue gain and a corresponding cost to the
State Sports Wagering and Online Gaming Regulatory Fund
established by the bill. The DCP will incur a regulatory cost of up to
$2.4 million in FY 22 and up to $2.2 million in FY 23 to hire 15 full-time
employees and one durational employee to meet the requirements of
the bill. The assessment costs that the DCP will charge will be made in
consultation with the tribes and any authorized operator of sports
wagering and the parties being assessed may request a hearing if they
are aggrieved by an assessment.
Section 38 increases the cost to fully fund the State Property PILOT
by up to $4 million beginning in FY 22. The impact in future years
would vary based on changes to municipal grand lists in the towns of
Ledyard and Montville. This correspondingly results in a potential
revenue gain to the towns of Ledyard and Montville that will vary 2021SB-00570-R000396-FN.DOCX Page 5 of 5
based on funding levels for the State Property PILOT. Under current
law, the Office of Policy and Management may reduce payments in
years that appropriations are insufficient to fully fund the grant.
The Out Years
The annualized ongoing cost impacts identified above would
continue into the future subject to inflation. The annualized ongoing
revenue impacts would continue into the future subject to growth in
the gaming activities authorized under the bill, and an increase in the
tax rate on online gaming to 20% beginning with the sixth year of
operation as specified in the bill.