Connecticut Moves Closer To Inking Deal With Sportsbook Partner

When the New England Patriots open their season on Sept. 10 against the Philadelphia Eagles, Connecticut sportsbooks will go head-to-head with neighboring Massachusetts for the first time ever on the opening weekend of the NFL season.

By then, there is a strong likelihood that the Connecticut Lottery Corporation (CLC) will name a new online and retail sports betting partner. The lottery is in the process of selecting a winning bidder approximately two months after operators submitted proposals for a partnership with the CLC, which is seeking a new operator after Rush Street Interactive pulled out of a 10-year partnership with the state that began in 2021.

“We’ve been very pleased with the quality and quantity of the respondents,” said Christopher Davis, who serves as the government relations and responsible gaming manager for the CLC.

While Davis did not divulge the number of applicants, he told Sports Handle last week that the CLC received submissions from multiple national operators. The lottery’s sports betting performance to date has lagged far behind DraftKings and FanDuel, which maintain a combined market share of around 80% statewide.

With Rush Street operating under the Play SugarHouse brand, the lottery generated about $20 million in net gaming revenue from retail and online sports betting during fiscal year 2022. The figure was dwarfed by the two market leaders, who generated combined NGR of $86 million last year.

DFS implications

The CLC began the process of selecting a new partner in April, two weeks after Rush Street announced plans to wind down its online and in-person sports betting partnership with the state.

The lottery issued a 38-page Request For Proposals (RFP) later that month, a week after the UConn men’s basketball team won its fifth Division I national championship in program history. By early May, Rush Street stated on its 2023 first-quarter earnings conference call that its capital and resources would be better allocated elsewhere.

Rush Street’s replacement, according to the lottery, must provide a comprehensive back office solution to handle its player account management system. The CLC also seeks an operator that possesses a veteran management team, strong compliance and risk management capabilities, and a seamless bonus and promotional apparatus on the retail side.

With news that Rush Street Interactive $RSI is going to wind down its partnership with Connecticut as the state seeks a new sports betting partner, we can see how the online and retail ops have performed: pic.twitter.com/cQxR2fXnTc

— Matthew Kanterman, CFA (@theKantoarbot) March 28, 2023

DraftKings’ hold percentage in several states eclipsed 15% last year on same-game parlays, compared with a hold of around 5% on all other wagers. Innovative features such as SGPs will be important as the lottery tries to “eat into the market share” held by the two leaders, Davis said.

The successful bidder may also provide a Daily Fantasy Sports solution as part of its proposal. While the RFP initially required applicants to submit a fantasy sports proposal, the lottery included an amendment that allowed bidders to complete a submission without a DFS partnership. Applicants did have the option, however, of including a DFS component.

Rush Street defeated several national brands for the contract in 2021, most notably BetMGM and Caesars Sportsbook. Though Davis indicated that the winning bidder will inherit the remaining eight years of the contact, the contract could be extended with authorization from the state legislature. Theoretically, DraftKings and FanDuel could have entered the bidding process, but neither company has confirmed publicly that it did so.

Retail book at the XL Center

Although the lottery is authorized to offer up to 15 retail sportsbooks throughout Connecticut, only nine are open at the moment.

The lottery is targeting a September opening for an in-person book at the XL Center, a Hartford facility that hosts several UConn men’s and women’s basketball games each year. After several delays, construction is moving along “pretty smoothly,” Davis told Sports Handle at a national gambling conference last week in Denver.

Had the Patriots moved to Hartford in the early 2000s, the tenor of in-stadium betting in Connecticut would have been altered drastically. Patriots owner Robert Kraft reached a deal with the state in November 1998 to relocate the franchise to Hartford. A famous photograph in the Hartford Courant captured Kraft signing the contract next to then-Connecticut Gov. John Rowland.

The state of Connecticut had plans to build a $374 million stadium in downtown Hartford, leading to a projected move by the Pats to the Nutmeg State in 2001. But Kraft pulled out of the deal in April 1999, citing construction delays. In the aftermath of the collapse, proponents of the Hartford stadium project contended that Kraft used the city as a pawn to receive an improved stadium financing deal from Massachusetts.

The northeast Connecticut border with lower Massachusetts is less than an hour from Gillette Stadium, the home of the Patriots, who have won a league-high six Super Bowl titles in the Bill Belichick era.