Lawmakers allow CRDA net profits from planned Hartford sports betting lounge

Gambling profits from a new sports betting lounge planned for Hartford’s XL Center will go to the Capital Region Development Authority under the large budget adjustment Gov. Ned Lamont signed into law Monday.

The bill includes language allowing the CRDA to craft agreements with state agencies that will see betting profits flow to the quasi-governmental economic development agency, CRDA

Executive Director Michael Freimuth told members of the CRDA Venue Committee during a meeting Thursday.

Without betting proceeds “we would lose our shirt,” Freimuth told committee members.

CRDA projects the sports bar would run with losses of $400,000 to $600,000 yearly if it had to exist solely on food and drink sales. Betting proceeds – after taxes and other costs – are estimated to bring in about $1 million yearly, Freimuth said in an interview following Thursday’s meeting.

The betting portion of the operation will be handled entirely by Connecticut Lottery Corp. staff. Net profits, however, will go to the CRDA if it can finalize agreements with the lottery and other agencies. 

There are a host of factors that could impact revenue and losses, including which teams make it to championship contests, Freimuth said. It is, however, clear the sports lounge will at a minimum break even with betting revenue, he said.

“If the Giants get into the Super Bowl, it might be better than if the San Diego Chargers get into the Super Bowl,” Freimuth said. “If the Yankees get into the World Series it will be more significant than Kansas City against St. Louis.”

Any profit from the lounge will help pay down annual operating losses for the larger XL Center.

Before the COVID-19 pandemic, the XL Center ran operating losses of about $2 million yearly, Freimuth said. That was subsidized by a mix of revenue from CRDA parking facilities and state funds. The CRDA projects losses of about $3 million in the coming fiscal year due to COVID’s lingering impact on events. However, this year the CRDA will also be able to tap into

American Rescue Plan Act funds to help cover that expense.

The CRDA still must build a sports bar. It is among a package of $15 million to $20 million in state-funded upgrades and repairs currently out to bid.

Freimuth said his agency contemplated building a sports bar even before sports betting was on the table. Initially, the thought was to have a sports bar open just for events and functions.

Adding sports betting to the mix allows the lounge to be open 11 to 12 hours daily, seven days a week, he said.

“It’s going to produce a net gain for us, but it’s also going to put a level of energy into the building that’s going to be new and exciting,” Freimuth said.