Rob Simmelkjaer‘s arc from the anchor desk at three of America’s most prominent sports networks to the chairmanship of the Connecticut Lottery board is unique in and of itself. His part in helping to bring legal sports betting to the state makes it even more so. But his time at NBC Sports, ABC, and ESPN, plus a law background and a resident’s insights on the quirks of this new market seem to have made him uniquely qualified. So far, so good.
PlayUSA spoke with Simmelkjaer about what’s done, what’s left to do and what to expect in the future from Connecticut sports betting.
PLAYUSA: Sports betting has popped up around the United States in little mushroom pods, and you’re right in the heart of one of the really big ones. How important was it for Connecticut, revenue-wise, to start pulling back some of that sports betting handle that was going to neighboring states?
Rob Simmelkjaer: It was very important. It was very important for us to get to market before New York [mobile]. We felt that was going to be really important to get out there. So much of our population in Connecticut is in southwestern Connecticut, which is the commuter area. Or, at least it used to be before COVID. Now, fewer people commute, obviously.
But we wanted to make sure we got to market quickly and got a chance to establish Connecticut’s business before we compete with New York and people downloading apps to play in New York instead. So that was big for us. We’re seeing benefits from that already. And we hope that’s something that will be a sustainable advantage for us even after New York does launch.
PLAYUSA: And that’s just the process of getting users to download, register, get comfortable with it, get that thumb memory of where they’re going to go, instead of having it with a New York app?
RS: You got it exactly right. That, and in them getting to deposit and play for the first time on a Connecticut app
PLAYUSA: The state of New Jersey has a sizeable amount of handle, around 20-25%, coming in from New York. I know it’s really super early, but do you have any kind of a blush of how many of those New York dollars are coming home to Connecticut on the train or I-95?
RS: I don’t have numbers on it yet, but I do know I’ve seen heat maps of where our bets are coming from online. And we are seeing pretty significant heat coming from border areas, coming from Greenwich, coming from the areas along the border with New York, particularly that Greenwich area in southwestern Connecticut, a little bit farther northward as well up in Ridgefield. But yes, we are seeing that as well as at the Massachusetts border. We’re seeing significant betting right just across the border from Springfield in northern Connecticut. We’re also seeing significant retail traffic at our northernmost retail location in Windsor Locks, which is near Bradley only about 15 minutes from the Massachusetts border. We’re seeing a lot of retail activity there as well as in Stamford, which is one train stop away from Grand Central, but we’ve especially seen it in a Bradley.
PLAYUSA: What did Connecticut regulators learn from other states when setting up sports betting?
RS: We were able to learn a little bit of what worked in other jurisdictions. But we had a unique situation because we have these tribal relationships going back to the early nineties. The tribes had taken a pretty strong point of view from pretty much the time PASPA was overturned that if there was going to be sports betting in Connecticut, they should have exclusively. They considered it a casino game, something that was exclusive to them. So the state didn’t feel that way. And so there was an impasse that existed for a while, between the previous administration, Governor [Dannel] Malloy and the tribes. They weren’t able to get anything done. When Gov. [Ned] Lamont came in … pretty early in my time as lottery chair, I sketched out what I thought would be the deal that would get it done, which turned out to be pretty close to what we did, where we gave three or four parties sports betting.
[Tribes] got online casino games, which was a big win for them and something that was worth it for them to give up the exclusivity of having sports betting in the state. And we gave the lottery online lottery ticket sales. So it’s unique because of what we already had, the position tribes were taking.
The tribes had threatened to basically breach the compact if Connecticut went and gave sports betting to 10 or 12 different licensees, [if] they went through New Jersey route and just said, ‘Okay, it’s open for all comers.’ The tribes had said, ‘Oh, we’re going to consider that a breach of our compact with the state’ and their leverage there was that they give 25% of their slot machine revenue to the state, which is, hundreds of millions of dollars a year to the state in revenue. They were going to withhold that. So that’s something that nobody in the state wanted. It was sort of their piece of leverage that they used to get a deal done, essentially. And the state obviously had the leverage of having to authorize the tribes to do anything off their tribal lands, whether it was sports betting or casino games or whatever. So each party came to it with some leverage. And the deal we ended up doing is exactly the deal that I thought we would do before we even sat down at the table.
PLAYUSA: Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, spoke at the Global Gaming Expo about the process and noted how fervent the state was to get sports betting done and getting online casino worked out very well for them.
RS: It was clear that was going to be the big win for them. Everyone knows that is a bigger market per capita than sports betting is. It’s a higher-margin business. And it is something that was even more important for them in the wake of COVID and the impact that had on their finances, on their onsite business. When you come through a year where you had to shut the casinos down for a while, then even when they reopen, crowds were way down. There was concern about being in crowded places. A lot of their clientele consists of older, more, somewhat vulnerable people to COVID.
So they had lots of reasons to get that and they needed it, frankly, on the heels of COVID. So you’ll see that. And then we knew that would be a big day carrot to help get a deal done.
PLAYUSA: Your background is pretty diverse for a lottery board chairman. How did you get from an ESPN anchor chair to a boardroom in Hartford?
Rob Simmelkjaer: My career has sort of spaned two things. I’ve always been interested in sports and media, which has been a big part of my career from ESPN to NBC Sports and then the sort of law and public policy or public service. I went to law school. I practiced law for a few years. And so this role with the Connecticut lottery, when Gov. Lamont asked me to take on this role as chairman of the board of Connecticut lottery, it was perfect for me in a way, because it was actually a very rare, perfect crossover between the two things that I’ve done in my life, having a legal background, being involved in political stuff. I’ve never have been in an official – well, I ran for office locally, once in 2017 – but I hadn’t ever had it as my job to be on the political side, but I’ve always had it as sort of something I’ve been passionate about and involved in.
And so with the lottery, especially because of the fact that we knew sports betting was going to be a key priority, and I had spent a lot of time at NBC Sports since PASPA was overturned, getting to know that market, figuring out how a company like NBC Comcast could play in the market. I had gotten pretty well-versed in that market and the dynamics of it. Combining that with the political and sort of policy side of legalizing it and, and everything else that lottery does, I just thought it was a perfect combination for me.
It’s a volunteer role. It’s not my day job. I do that as a volunteer. I certainly spent more hours in the last six months on it than I ever thought I would for a volunteer role because it was important. But now that we’ve gotten that done, I’ll probably go back to more of a traditional board role where, we have a meeting every month and I’m talking to the president every week or so, but it’s definitely been an intense level of involvement for the last six to eight months, but I think it’ll probably go back to something more normal.
PLAYUSA: Did you arrive in Connecticut as a commuter, too?
Rob Simmelkjaer: Yeah, that’s it exactly. When I moved to Connecticut, I moved from New York City to Westport, Conn., at the beginning of 2014. And that was because NBC Sports headquarters moved from 30 Rockefeller Plaza to Stamford, Conn. So 10 miles away from my house.
PLAYUSA: What’s the next important moment for Connecticut sports betting?
Rob Simmelkjaer: I think we’ve cleared all of the really big hurdles now. I think the next steps are, first we still have a lot of retail locations to open around the state. So that, from a lottery point of view, that’s a big step, as well as getting out in the market with an online lottery ticket sales platform, which we’ll try to have as closely aligned as possible to our sports betting products so that there can be cross-pollination between those two platforms and those two audiences and markets. So there’s that as well as just sort of growing the market. I mean, it always takes a number of years to develop a market. So both us, as well as the tribal casinos will be investing in marketing and things like that to develop the market. So I think that’s going to be a trend.
That’s not going to be a light switch flicking on and off. That’s going to be something that’s a dimmer that gets turned up over time as the market develops more and more. And then I think, obviously, we’ll get some numbers in, but it’ll take a while for the numbers to really be meaningful in terms of what kind of revenue this is driving.
I’m thinking maybe after March Madness might be the first time we can really look at revenue from this and have some sense of baseline to use in making future estimates on revenue. I think it’ll probably take that long. So we’ll get through the rest of NFL season, through a Super Bowl, through March Madness. We can look then and say, ‘OK, here’s what we can now assume as sort of a baseline to make future projections off of.’
And then lastly, I always make sure to talk about the responsible gaming side of this. And I think we want to make sure that we keep a really close eye on calls to the problem gambling hotline. We want to keep a close eye on how many people self-exclude themselves from that, how many people do we get a sense maybe from family members or friends calling to that hotline saying, ‘I think my husband, my father and my boyfriend, my wife, sister, daughter has a problem gambling.’
That’s going to be really important for us to keep an eye on that because this is a big change. We added a lot more gaming to the state in one fell swoop. And I think we’ll have to constantly be looking at data on what we’re seeing in terms of problem gaming and what resources need to be available.
We made a significant increase in the resources available through this process. Through this legislation, a lot more money is now available to the Connecticut Council on Problem Gambling, the Department of Mental Health and Addiction Services, all of that. So that’s good, but I think we’ll need to get a sense over the next year or so of whether it was enough.
PLAYUSA: What do you think the character of Connecticut sports betting will be? It’s not Nevada, it’s not New Jersey. What is it?
Rob Simmelkjaer: Absolutely. And we expect in Connecticut, especially once neighboring states legalize it, most of our revenue will come from people who live in Connecticut. Right now, we’re definitely getting some from outside the state.
We think this is mostly going to be a market for Connecticut residents. And we’ll see how it develops over time, but yes, this is definitely not a tourist attraction.
I wouldn’t say entirely, because I think Mohegan [Sun] would still draw lots of people, from certainly, Massachusetts. They’ll continue to do that. They draw from Rhode Island because they’re great casinos. It’s a great experience to go there. They’ve got great food. They’ve got entertainment, they’ve got great acts coming through. So I think we do have some of that, but it’s definitely more regional than, to your point, about Vegas now. People aren’t flying into Bradley to go gamble.