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On May 25, 2021, the Connecticut General Assembly enacted legislation authorizing retail and online sports betting, online casino gaming, and online daily fantasy sports (DFS) to be offered exclusively by the Connecticut Lottery Corporation (the Lottery) and the state’s Mashantucket Pequot and Mohegan Indian Tribes (the Tribes). On August 31, Connecticut’s Legislative Regulation Review Committee adopted emergency gaming regulations effective for the next 6 months while the state finalizes permanent rules.

The bill was developed alongside amended state-tribal gaming compacts allowing each of the Tribes to conduct retail and online sports betting and DFS operations on tribal land. The expanded gaming provisions become effective once both compacts are approved by the U.S. Department of the Interior and published in the Federal Register. The Interior Department officially approved both compacts on September 9, 2021, and has since published acceptance of both the Mohegan Compact and the Mashantucket Pequot Compact. The provisions became effective upon these publications, and gaming licenses can now be issued.

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Under the new legislation, the Connecticut Department of Consumer Protection (the Department) will issue Master Wagering Licenses to each of the Tribes and the Lottery. These licenses will permit the Tribes to conduct online sports betting, online casino gaming, and DFS operations throughout the state. Each Tribe will be permitted to operate one online sports betting skin and one online casino gaming skin. The bill makes no mention of a skin limit for DFS.

The legislation also allows the Tribes to partner with online gaming platform operators, which may conduct operations on the Tribe’s behalf, provided they have obtained Online Gaming Operator Licenses from the Department. The Tribes have already announced exclusive online gaming partnerships: the Mohegan Tribe with FanDuel and the Mashantucket-Pequot Tribe with DraftKings.

The Department will also issue a license to the Lottery, allowing the organization to: (i) offer in-person sports betting at up to 15 retail locations; and (ii) offer one online sports betting skin in partnership with a licensed online gaming operator. The Lottery announced its selection of Rush Street Interactive as its partner.

Each Master Wagering License will be issued for a 10-year period, with a single 5-year renewal option. All Master Wagering Licensees will be required to make monthly payments to the state and to make annual payments into the state’s problem gambling programs.

The new gaming bill and corresponding emergency regulations also require an Online Gaming Service Provider License for any vendor providing goods or services “related to” online sports betting, casino gaming and DFS. Vendors that must be licensed include anyone providing gaming-related goods or services “integral to the public confidence, credibility or integrity of the gaming industry” in Connecticut.

DFS CONTROVERSY

The expanded gaming legislation upended Connecticut’s DFS industry, giving DraftKings and FanDuel, as the Tribes’ exclusive online gaming partners, a duopoly over DFS in the state.
Historically, DFS operators offered contests in Connecticut without limitation, arguing DFS is a game of skill not requiring explicit authorization. The new bill explicitly legalizes DFS, but only for Master Wagering Licensees and their online gaming partners, thereby shutting out existing operators.

To avoid interrupting DraftKings’ and FanDuel’s DFS operations once the legislation passed, the Department issued provisional daily fantasy contest operator licenses effective through September 30, 2021. If permanent licenses have not be issued by that date, the Department will likely extend the provisional license term.

TIMELINE FOR LAUNCH

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The Department can begin issuing gaming licenses with the Department publishing its approval of the Mohegan Compact and the Mashantucket Pequot Compact in the Federal Register. Once licenses have been issued, operators will be required to give notice of their intent to “launch” online sports betting and casino gaming operations at least 10 days in advance.
In a recent announcement, the Department confirmed it expects online sports betting and casino gaming will officially “go live” on October 7, 2021.

The full article in its original form can be found here.

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Zachery B. Roth (LAW ’15) is an associate at White and Williams LLP in Philadelphia, Pennsylvania. Zachery assists technology and gaming clients in navigating the complex, rapidly developing body of laws and regulations governing online sports betting, i-gaming and daily fantasy sports in numerous states. He also has experience representing insurance and corporate clients in commercial disputes.

Frank A. Bruno is a partner at White and Williams LLP in Philadelphia, Pennsylvania. He is a technology lawyer who focuses on patent law and has considerable experience in electrical and computer technologies including hardware, software, and telecommunications.

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