Connecticut is being touted as a big potential market for sports betting. It is estimated that the state could generate $1.5 billion or more annually.
In addition to this, it is thought that online casinos could gross up to $350 million in gaming revenues, providing enormous benefit in taxes for one of the smallest states in the union.
Eric Ramsey, an analyst for the PlayUSA.com network, said: “Connecticut is a relatively small state, but the market has a handful of attributes that should help it punch a bit above its weight.”
He went on to explain: “Geographically, the state is in a good place, with the potential to draw significant out-of-state business from New York and Massachusetts. And Connecticut features one of the highest median household incomes in the US. Both factors should help the market reach maturity relatively quickly.”
Sportbooks Could Launch in the Near Future
In theory, sports betting could be on offer in the Constitution State as early as this fall. After negotiations with the Mashantucket Pequot and Mohegan tribes, Gov. Ned Lamont signed the online gaming bill into law at the end of May, effectively legalizing retail and mobile sports betting—as well as online casinos, poker rooms and lotteries.
The tribes, along with the lottery will be obliged to make monthly contributions to the state’s General Fund and the legislation also requires them to make significant payments towards programs to combat problem gambling.
Projections from PlayCT suggest that Connecticut could reach the $1.5 billion figure for retail and online sports betting after three years —resulting in over $100 million in operator revenue. Assuming a tax rate of 25%, this could generate $25 million annually in taxes.
Comparisons with Iowa would appear to back up such predictions. Of all the jurisdictions that currently have regulated betting markets, The Hawkeye State is the one that most closely resembles Connecticut.
Sports betting in Iowa generated $573 million in the first four months of this year—resulting in over $40 million in gross operator revenue. These figures are almost exactly on a par with those envisioned for CT.
Dustin Gouker, lead analyst at PlayUSA.com, agrees with Ramsey: “Connecticut will be a successful market, and likely a significant revenue driver for the state for years to come,” he affirmed.
“The state’s high median income and proximity to New York should be significant contributors to the market’s growth, particularly early on as New York makes its own push into the online sports betting market.”
Online Casinos to be Even More Lucrative
Online casinos are likely to exceed the figures for sports betting, with estimates around the $350 million mark for annual wagering —thereby generating $70 million in tax revenue. A point not lost on Ramsey.
“Sports betting grabs more headlines, but in states where it is legal, iGaming has proven to be the far more reliable revenue generator,” he pointed out.
“Plus, history shows that a thriving full-scale online casino gaming market helps spur interest in online sports betting, making it the tide that lifts all boats. And there is no obvious reason that Connecticut won’t follow a similar pattern.”