Connecticut Budget Includes Daily Fantasy Sports Legalization

by Jim Hall

ConnecticutWith a budget finally passed within Legislature, the state of Connecticut has decided to include the legalization of daily fantasy sports.

Daily fantasy sports has been a hot topic of debate for the past few years now. In 2015, several states came out against the industry, wanting to see operators shut down services within their borders. By 2016, more states were on board and eventually, this led to legislation created to legalize the activity as well as regulate the industry. In 2017, even more states have begun to pass legislation to allow players to enjoy DFS contests in a regulate environment. The latest to do so is Connecticut.

DFS in Budget Plans

For the past several months, the state of Connecticut has struggled to create a budget plan that lawmakers can agree on. The General Assembly was finally able to pass a bipartisan bill in both houses in October and the bill was signed into law on Tuesday by Governor Dannel Malloy. The version that was approved includes daily fantasy sports legalization and regulation.

However, before daily fantasy sports can take place, the law requires that changes are made to state tribal compacts.

Since July of this year, the state has been without a budget for the 2018-2019 fiscal year. The state has continued to take on more debt and the governor had to decide to cut spending with an executive order. This was an extreme case where something had to be done in order to avoid adding more to the $3.5 billion budget deficit.

The budget actually made it out of the General Assembly earlier in the month, but the governor did not like it and vetoed the bill. Lawmakers went back to work and were finally able to pass a bill that was approved by the governor. Last week, the Senate presented their proposal that was updated and totaled more than $41 billion. This was approved by a vote of 33 to 3. This one included daily fantasy sports while the previous budget plan did not.

The bill was then sent to the House of Representatives who took just one day to decide that they were in approval with a vote of 126 to 23. Malloy then quickly decided to sign the measure into law.

Daily Fantasy Sports

The language in the measure regarding daily fantasy sports is similar to what has been used in other states. Key points include that players must be 18 years of age or older to take part. The Commissioner of Consumer Protection has regulatory oversite with operators set to pay a yearly registration fee of $15,000 or 10% of revenue generated from players in the state. A tax of 10.5% is also set for operators to pay based on revenues earned from state residents.

In 2019, the state expects to be able to earn $500,000 in revenues from daily fantasy sports. The regulators for DFS are to be adopted by the regulatory body by July 1st of next year.

As mentioned, tribal compact changes need to take place before DFS can begin. The state has agreements with the Mashantucket Pequot tribe as well as the Mohegan tribe. Each have exclusive rights to offer gambling in the state. In return for this right, the state receives 25% of the slot gaming revenue of the tribes.

Additions were made to the legislation to try and provide legal standing when it comes to the tribes and DFS. The governor and the tribes will have to amend their agreements in order for daily fantasy sports to become a reality in the state. The amendments must then be approved by the General Assembly and the US Department of Interior before it can take effect.