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By Damian Martinez, journalist at G&M News.
Three years ago, you were appointed as Director of Legal and Business Affairs for the Sports Betting Division at the Connecticut Lottery Corporation. What are your main responsibilities in the role?
I wear a few different hats overseeing sports betting operations for the Connecticut Lottery Corporation (CLC). I am responsible for managing partnerships, and we have several. Last year, Fanatics Betting & Gaming (Fanatics) became our online and retail bookmaking partner. I spend a large portion of my time engaging with them on several initiatives. Fanatics does the vast majority of the work in the online channel, but CLC’s retail opportunity in Connecticut is unique. Under the legislation that legalized sports betting, CLC can have up to 15 retail sportsbooks in the state. We are currently live in 10 states, 8 of which are with our partner Sportech. We also have arena partners in both Hartford and Bridgeport, so much of my time is focused on managing partnerships and the performance of the current retail locations. I also wear a business development hat as we look to open the final handful of locations. Additionally, CLC staffs some of the retail locations, so we created a retail department here to support that. We also are largely responsible for anti-money laundering oversight of the retail locations, which is a significant undertaking and obligation that we take very seriously. To support all of this, I manage a small but vibrant team here. As CLC is a quasi-governmental entity, I also have external-facing responsibilities with CLC’s Board of Directors, the legislature and media.
What are the main benefits of the agreement Fanatics Betting & Gaming?
I’m thrilled with this partnership. Fanatics hit the ground running in Connecticut last December 2023, and their performance in just a half year has been remarkable. The bottom line is that this agreement gives CLC a strong brand with which to affiliate. Fanatics, with its sports betting, merchandise, and collectibles verticals, has immediate recognition nationwide. In addition to their superior bookmaking/trading, we’re very excited with their loyalty program, FanCash, which is live for both online and retail sports betting. Players can earn up to 5% back on bets in FanCash that can be redeemed for bonus bets and team merchandise. It’s something that any sports fan and bettor will appreciate. The team at Fanatics has also been great to work with. Mostly industry veterans, they have seen the good and bad over the past several years, and the product they are putting forward across the country represents those collective learnings.
Besides these kinds of partnerships, in what other processes can U.S. lotteries participate?
Most lotteries have, whether intentional or not, “sat out” as a sports betting operator. Perhaps, part of the reason is that the tax revenue from sports betting is fractional compared to the massive revenue generated by traditional lottery ticket sales. Other lotteries are dedicated to regulatory issues, so they may be involved in that capacity (Virginia and Maryland come to mind). Our thought in Connecticut was that we didn’t want our gaming competitors to be the only participants in this new gaming vertical, even understanding that the revenue opportunity wasn’t massive. The opportunity to enhance our portfolio of offerings and modernize it by selling online made this attractive for us. I would urge any lottery with the opportunity to participate as an operator to seriously consider it, even though it may take them out of their comfort zone. Lotteries need to redouble efforts to appeal to younger customers, and to retain current players, and having another product under that lottery’s umbrella can be one part of that effort. A final thought would be that as states continue to modernize gaming, lotteries should use sports betting legalization as a conversation starter to introduce/legalize iLottery. Gaming competitors (casinos or racetracks, for example) shouldn’t be able to expand their offerings, while lotteries -who solely exist to benefit states- can sit on the sidelines.
Online and in-person sports betting has been legal in Connecticut since 2021. How has this segment evolved in the state during this time?
The product as a whole has seen strong growth. Connecticut is one of the handful of states that has both online sports betting and online casino. We also were relatively early adopters, approaching three years of sales this fall. As such, CLC is seeing growth not only because of the Fanatics partnership, but also as the market continues to expand to new players. CLC’s ability to increase its retail presence will only add to our footprint, as each new location essentially is a billboard for our Fanatics retail and online product.
Right now, what regulation challenges does Connecticut’s gaming have?
For the most part, I think the state got it “right” in the gaming expansion legislation and regulations. We continue to engage with our regulator and lawmakers on certain issues (predominately, related to affiliate marketing and advertising), but this is not one of the states where there has been a need to go back to the drawing board to address significant misses. People that were born after the year 2000 have different gaming preferences than the older generations, so how can lotteries engage with younger audiences? It’s certainly a challenge in Connecticut, and also in any state with a mature lottery. I believe a lottery’s core business will continue to be brick and mortar retail sales (we have approximately 2,800 retailers in the state of CT), but clearly there’s a desire among players -and not just younger players- to have an omnichannel experience. To that end, we will be launching iLottery for some of our games in the near future, we have a second chance program (where people can enter non-winning lottery tickets online to win prizes), and of course mobile sports betting through Fanatics Betting & Gaming.
Which are the future goals for the CLC?
For the rest of 2024 and into 2025, we will look to add new retail locations and ensure year-over-year growth in the existing places, as retail sports betting is an undervalued but significant opportunity in this industry. I will also look to support Fanatics in any way possible while they continue their rapid expansion across the country, with an especially strong presence in the northeast (Pennsylvania, New York, New Jersey, Connecticut, Massachusetts, and Vermont). One particular challenge we will have in the coming years is to talk cohesively to this audience, whether they are our core retail customer, a retail or online sports bettor, an iLottery customer, or a second chance customer. Lotteries need to adapt quickly to meet their customers where they are, whether retail, online, or both.