“Where does all the casino money go?” It is perhaps the one question that I am asked more than any other. With the state continuing to face a substantial budget deficit, people are even more interested in finding out exactly how much revenue the state receives from its two casinos and how these funds are allocated. The purpose of this week’s column is to give you some background about Connecticut’s agreement with the casinos and how money is distributed.

Each Lottery Corporation operates under the mandate of its parent province to facilitate the lotteries and casinos of the province and use the revenues to support local charities and non-profit organizations. So, where does the money really go? The first question is, who decides where the money goes? The casinos that do get to offer online sports betting will either have to invest in digital infrastructure or make an awkward partnership with companies like DraftKings, Bet365, or FanDuel, which.

In 1993, then Gov. Lowell Weicker and the leaders of the Mashantucket Tribal Nation agreed on a compact that would allow the Mashantucket Pequots to conduct slot machine gaming in exchange for the state receiving 25% of all slot machine revenue. This was later expanded to include the Mohegan Tribe’s slot revenue when their casino opened in 1997.

To this day, Connecticut has collected over $5.2 billion in slot revenue from the state’s two operating casinos (Foxwoods and Mohegan Sun) since the accord was brokered. Last year alone, the state received nearly $378 million in revenue from the casinos. While this is indeed a lot of money it is down considerably from the over $430 million the state received in 2007, certainly a sign of these troubled economic times.

So where does all of this money go? The simplest answer is that it goes back to the taxpayer. Nursing homes, schools and public safety programs all benefit from money raised by the casinos. In fact, all 169 municipalities in Connecticut get a portion of the funds raised through slot machine revenue through a fund created solely to ensure that each town receives funding.

Known today as the Mashantucket Pequot and Mohegan Fund (Pequot Fund), a portion of the money raised through casino gaming is set aside and placed into this separate nonlapsing account so that it can be allocated to each and every municipality in the form of state aid. In its 17 years in existence, the fund has provided hundreds of millions of dollars in state aid to our local communities.

Money is distributed from the fund to towns based on number of various formulas and criteria, including size and location. Unlike other state grants to municipalities that are designated for a specific purpose, towns can use money from the Pequot Fund for anything; giving them great flexibility to fund education initiatives, public works projects or any need in that community.

Money that does not get diverted into this fund goes directly into the General Fund. One of the reasons that I opposed last year’s Democrat state budget is that it took more than $30 million (of the $90 million allocated in 09) out of the Pequot Fund in order to reduce the deficit in the General Fund. This meant that every city and town saw their portion of the fund reduced. In fact, the towns of Avon, Canton and Simsbury together received less than half lost of their fund allocation from last year to this year.

One misconception is that the money the state receives from the casinos was intended to go to education. This was never the case and is often confused with revenue generated from the state lottery. The lottery was established in 1971 and from 1975-1977 the revenue from instant games went to education equalization grants. This was later discontinued and now all money, included the $283 million raised last year from the lottery, goes directly into the General Fund.

For a breakdown of what each town receives in aid from the Pequot Fund, or for more information regarding money the state receives from the casinos, please contact me at 1-800-842-1421.

3:04

Catch up on the developing stories making headlines.

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The Associated Press

ATLANTIC CITY, N.J. -- The American casino industry wants gambling regulators to make it easier to adopt cashless payment transactions on the casino floor, citing a desire to help customers avoid handling money during the coronavirus outbreak.

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In a report released Tuesday, the American Gaming Association, the gambling industry's national trade group, called on regulators in states where gambling is allowed to update their rules or laws to integrate cashless options for gamblers.

The push follows an 18-month study of the issue by both commercial and tribal casinos, and equipment suppliers to try to pave the way for cashless transactions on a wider basis.

Presently, a small number of casinos use such payments, which include debit or credit cards, as well as apps like Apple Pay, Google Pay, and PayPal. Wider acceptance of these options has long been a goal of the gambling industry.

“Advancing opportunities for digital payments has been one of our top priorities since my first day at the AGA,' said Bill Miller, the gambling group's president and CEO. 'It aligns with gaming’s role as a modern, 21st century industry and bolsters our already rigorous regulatory and responsible gaming measures. The COVID-19 pandemic made it all the more important to advance our efforts to provide customers with the payment choice they are more comfortable with and have increasingly come to expect in their daily lives.”

Health officials say the coronavirus can survive on paper currency, but that risk is low compared to person-to-person spread, which is the main way people get infected. The U.S. Centers for Disease Control and Prevention says using touchless payment methods is a good idea where possible.

So far, there has not been widespread adoption of digital payment options at casinos or other gambling facilities in the U.S. Industry executives say this is due to several factors including limits imposed by state legislators or gambling regulators.

A handful of casinos in Nevada and some tribal casinos across the U.S. have digital options, but the technology is a new concept in many places.

The Nevada Gaming Commission has a hearing scheduled for June 25 where it is expected to accept the state Gaming Control Board’s recommendation for amendments to state regulations that would streamline the approval and testing process for modern payment methods.

David Rebuck, director of the New Jersey Division of Gaming Enforcement, said cashless transactions are already legal, adding, “We await products to be submitted by the casinos for approval to use on site.”

Nevada gambling regulators are “open to looking at new ways of how technology, including cashless wagering, can help attract new customers and be beneficial for not only the industry but even for responsible gaming measures as well,” said Sandra Douglass Morgan, chairwoman of the Nevada Gaming Control Board.

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Among the benefits of cashless transactions cited by the AGA are the ability for gamblers to more easily follow and set limits on their gambling activity, and cutting down on the number of currency transaction reports that casinos have to file with the government regarding some customer transactions at the casino.

The continued spread of the coronavirus in parts of the country as many casinos reopen after months of being idled due is another reason the industry wants to ramp up cashless payments quickly.

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