CT Towns Demand 50% Share of Casino Slot Revenue

Connecticut’s 169 cities and towns are pushing back against more than two decades of shrinking casino revenue shares, and municipal leaders made their case directly to state lawmakers Wednesday morning in Hartford.

New London Mayor Michael Passero, who serves as president of the Connecticut Conference of Municipalities, called the decades-long erosion of casino aid to towns a matter of fundamental fairness. “It was a great injustice,” Passero said during a press conference at the Capitol. “Revenues which were intended for municipalities, especially municipalities like mine, started to be diverted in 2002 because of the state’s own fiscal woes. That diversion has continued to this day, even though the state is much more healthier, financially.”

The numbers behind that frustration are striking. Connecticut will share just $52.5 million in casino revenues with municipalities this budget cycle. That figure represents roughly 14% of the $365 million in video slot revenues the state expects to collect this fiscal year from its two tribal casino partners. Municipal advocates are calling on Gov. Ned Lamont and the General Assembly to flip that ratio to a 50-50 split, a move they say would begin restoring the level of support towns received in the early years of legalized gaming.

How Connecticut’s Casino Deal Was Built

The story starts with Foxwoods, which the Mashantucket Pequot tribe opened in 1992 on sovereign land near the Ledyard-North Stonington border in New London County. The casino launched with table games only. Video slot machines came a year later, after then-Gov. Lowell P. Weicker Jr. negotiated a compact that resolved the state’s legal objections to the game. In exchange, the tribe agreed to give Connecticut 25% of all video slot receipts. The Mohegan tribe adopted the same arrangement when it opened Mohegan Sun in 1996 on sovereign land within the boundaries of Montville.

Weicker, famously no fan of casino gambling, justified the deal by arguing that gaming operations would drive up demand for social programs, public safety, and affordable housing, services delivered primarily at the municipal level. Towns, he reasoned, should therefore receive the bulk of whatever revenue the state collected.

When the General Assembly built the budget for fiscal year 1993-94, lawmakers anticipated $113 million from the newly opened Foxwoods and pledged 78% of that total, or $88.1 million, directly to communities. Adjusted for inflation, that commitment would be worth significantly more today. What towns actually receive now is $52.5 million, from a much larger revenue base.

The Surplus Problem

What makes municipal advocates particularly frustrated is the condition of the state’s finances. Connecticut’s current $27.2 billion General Fund budget is technically projected to run a $6 million deficit, a shortfall equal to 1/40th of 1% of total spending. That number, however, excludes more than $1.8 billion in income and business tax receipts held back by the state’s volatility cap, a fiscal guardrail that deposits surplus revenues into a budget reserve fund rather than letting them flow into the operating budget.

To put that in stark terms: the unspent dollars sitting in that savings mechanism are more than 30 times the total casino revenue the state will share with every city and town this year.

The volatility cap has done exactly what it was designed to do, building a financial cushion that helped Connecticut weather economic turbulence. But municipal leaders argue the state’s improved fiscal position removes the justification for continuing to shortchange towns on gaming revenue.

The politics here extend well beyond New London County. Every Connecticut municipality receives a portion of the casino revenue distribution. For cities like Bridgeport and New Haven, which face chronic budget pressure and heavy demand for services, even modest increases in state aid matter. For suburban towns across Fairfield County, the casino revenue question is one piece of a larger puzzle around property tax relief and school funding adequacy.

Reporting from CT Mirror laid out the full scope of the revenue shift and the municipal coalition pressing for change.

What to Watch

The Connecticut Conference of Municipalities is pushing for the 50-50 split to be included in whatever budget the General Assembly passes this spring. Lamont has not publicly committed to the proposal. Legislative budget negotiations typically intensify through April and May, with the fiscal year deadline hitting June 30.

Towns will need to hold that coalition together as competing budget priorities crowd the conversation in Hartford. The casino revenue fight is not a new one, but advocates say the state’s current financial health makes this the strongest case they have had in years.