Connecticut Online Gambling Could Generate $388 Million In Annual Revenue

Only a few US markets include legal online sports betting and online casinos, and Connecticut joined that list on Oct. 19, 2021, when it launched both statewide.

Gov. Ned Lamont signed a bill in May, approving online casinos, online sports betting, and retail sports betting. Connecticut will become the sixth US state to offer both legal online sports betting and casino gambling.

The arrival of online casinos and sports betting should result in significant tax revenue for the state. Connecticut will take 18% in taxes from online gambling revenue in the first five years of operations. The tax rate goes up to 20% after five years.

That 20% tax rate will kick in with both online casinos and online sports betting presumably at full maturity. projects that online casinos can produce $330 million in annual revenue at maturity, with online sports betting adding another $88 million in annual operator revenue.

Taxed at 20%, the combined $418 million in annual online gambling revenue would yield $83.6 million in yearly taxes for the state.

The Potential Of The Connecticut Online Casino Market

If recent trends give any indication, online casinos should emerge as a major success in the Constitution State. Connecticut will join New Jersey, Pennsylvania, Michigan, West Virginia, and Delaware among US states offering legal online casino gaming.

The online casino business is booming in the leading US markets. Both New Jersey and Pennsylvania are on pace to clear $1 billion in online casino revenue in 2021.

Michigan, the newest state to launch mobile casino apps, entered the market in January. Through the first six months of operations, Michigan’s online casinos are on a path to surpass $870 million in operator revenue by the end of the year.

While Connecticut (3.6 million residents) has a smaller population than the biggest online casino markets, online casinos will likely emerge as a popular form of entertainment in the state.

Connecticut hosts two of the biggest land-based casinos on the east coast, Mohegan Sun and Foxwoods Resort Casino. The tribal ownership groups from those two casinos will each expand into online gambling.

The Mohegan Tribe (owners of Mohegan Sun) will partner with FanDuel for online casino gambling. The Mashantucket Pequot Tribal Nation of Foxwoods (owners of Foxwoods) chose DraftKings as its online gambling partner.

While Connecticut will only launch two online casino platforms, the arrival of FanDuel Casino and DraftKings Casino will turn the state into a thriving online gambling market. At full maturity, projects that annual online casino revenue could hit $330 million, yielding $66 million in yearly taxes (at the 20% rate).

Limited Competition Could Stunt Sports Betting

Connecticut’s sports betting bill put the Connecticut Lottery in charge of approving potential sports betting operators. The bill allowed two online sports betting brands to enter the market, with a third online sports betting platform operated by the Connecticut Lottery.

While the bill allows up to 15 different retail sports betting brands, online sports betting choices are capped at three. Per their partnerships with Mohegan Sun and Foxwoods, FanDuel Sportsbook and DraftKings Sportsbook won two of the online sports betting licenses up for grabs in Connecticut.

SugarHouse has entered the Connecticut market as the chosen partner for the state lottery-operated online sportsbook. The nation’s most successful sports betting markets have thrived on diverse selections of online platforms, but Connecticut bettors will be limited to a total of three choices.

While online sports betting still holds significant potential in Connecticut, the limits on available mobile sports betting apps could hurt revenue potential. projects that online sports betting could generate $88 million in operator revenue and $17.6 million in state taxes annually at full maturity.

Retail sportsbooks could add another $32 million in annual operator revenue. The state taxes land-based sports betting revenue at 13.75%, which would generate $4,320,000 in annual taxes.

About the Author

Geoffrey Fisk

Geoff Fisk is a San Diego-based freelance writer, specializing in the poker and gambling industries. He’s written for numerous platforms and has traveled the globe as a live poker tournament reporter. Geoff’s interests include the legal online poker industry in the U.S. and abroad.