Connecticut | Business
Why It Matters
Connecticut municipalities are pushing back against more than two decades of declining casino revenue sharing, arguing that the state has used local funds to paper over its own budget problems while leaving towns without adequate support. The debate over how to divide casino slot machine revenue in Connecticut has direct consequences for local services, infrastructure, and property tax burdens carried by residents across the state’s 169 cities and towns.
What Happened
Municipal leaders gathered at the state Capitol on Wednesday to urge Governor Ned Lamont and the General Assembly to reverse a long-standing trend of reducing the share of casino gaming revenues distributed to Connecticut communities. New London Mayor Michael Passero, who serves as president of the Connecticut Conference of Municipalities, led the charge, calling the revenue diversions that began in 2002 a “great injustice” to towns that were promised a meaningful stake in gaming proceeds.
Passero argued that while the state’s fiscal situation has improved significantly since those early diversions began, municipalities have seen no corresponding restoration of the funding they were once promised. “Revenues which were intended for municipalities — especially municipalities like mine — started to be diverted because of the state’s own fiscal woes,” Passero said. “That diversion has continued to this day, even though the state is much more healthier, financially.”
Connecticut’s relationship with tribal casino revenue dates to the early 1990s, when the Mashantucket Pequot tribe opened Foxwoods Resort Casino on sovereign land near the Ledyard-North Stonington border in New London County following federal tribal recognition. The arrangement established a framework for the state to receive a portion of video slot machine revenues from tribal casinos, with a share intended to flow to local governments.
By the Numbers
The figures presented by municipal advocates paint a stark picture of how much ground Connecticut towns have lost over the decades:
- $365 million — Total video slot revenues the state expects to receive from tribal casinos in the current fiscal year
- $52.5 million — The amount the state will actually share with its 169 cities and towns this budget cycle, representing roughly 14% of total slot revenues
- $1.8 billion — Income and business tax receipts withheld from the budget through a special state savings program, a sum more than 30 times the amount shared with municipalities
- $27.2 billion — Connecticut’s current state budget, which carries a projected General Fund shortfall of just $6 million, equal to roughly one-fortieth of one percent of total spending
- 50-50 — The revenue split municipal advocates are calling for going forward, which they say would restore towns closer to the support levels they received in earlier decades
The contrast between the state’s relatively healthy fiscal position and the modest sum it returns to local governments has become the central argument for advocates pushing reform. As Connecticut communities continue to grapple with rising costs and strained budgets, some residents have even explored unconventional responses to financial pressure — as seen in stories like this one about a Connecticut native who traded a mortgage and utility bills for van life in the American Southwest.
Zoom Out
Connecticut is not unique in facing tensions between state governments and municipalities over gaming revenue distribution. Across the country, states that have entered into tribal gaming compacts have repeatedly revisited how those revenues are allocated, especially as casino operations have matured and generated billions in annual receipts. The broader debate reflects a growing strain on local governments nationwide that depend on state-shared revenues to fund essential services without raising local tax burdens further.
In Connecticut, the squeeze on municipal budgets has intersected with other pressing local challenges. Communities are simultaneously navigating housing shortfalls, with some innovative approaches emerging — such as efforts explored in the Connecticut ‘YIGBY’ movement, which seeks to allow churches to build affordable housing on church-owned land to address local shortages.
What’s Next
Municipal leaders are calling on Governor Lamont and the General Assembly to act on the revenue-sharing proposal during the current legislative session. Advocates are pushing for a move to a 50-50 split of video slot revenues between the state and local governments. Whether state lawmakers will be willing to redirect funds away from a General Fund that, while nominally balanced, relies heavily on a large savings reserve, remains to be seen. The proposal is expected to face scrutiny as budget negotiations continue at the Capitol in the weeks ahead.