Connecticut Governor Malloy Signs Budget That Includes DFS Regulation

Connecticut Governor Malloy Signs Budget That Includes DFS RegulationAs the push for regulated daily fantasy sports sweeps the nation, Connecticut becomes the latest state to sign a law legalizing the contests.

Though the law will not go into effect until tribal compacts are amended in the state, Governor Dannel Malloy signed the bill on Tuesday.

The new law comes as part of a larger budget package, which the state was in desperate need of. To the frustration of Malloy, Connecticut was at a 123-day budget impasse.

Both the General Assembly and Gov. Malloy proposed unsuccessful budget packages since July 1st, but the Senate was finally able to push their proposal through.

The Senate’s $41 billion proposal passed 33-3 last Wednesday. The next day, the bill was sent to the House where it was passed 126-33.

DFS Provisions In New Budget

One difference between the bill vetoed by Malloy in September and the recently passed proposal is that the new budget includes DFS regulations. Some of the provisions included in the budget are the following:

  • The Commissioner of Consumer Protection will govern DFS operations.
  • The minimum age to play contests is 18 years old.
  • Operators will be taxed 10.5% on gross gaming revenues from Connecticut players.
  • The registration fee is $15,000 per year or 10% of revenue generated from CT participants.

Connecticut anticipates an additional $500,000 in revenue from daily fantasy sports operations in 2019. This is just a small part of closing the state’s $3.5 billion deficit, as the budget also includes cuts to various tax credits and funding programs.

DFS Still Needs Tribal Approval

The Mohegan and Mashantucket Pequot tribes of Connecticut hold exclusive gambling rights within the state. Each tribe has entered into a tribal-state compact that outlines revenue sharing and other operational framework.

The Office of Indian Gaming under the U.S. Department of the Interior is one of the regulatory bodies that must approve amendments to tribal/state compacts before the DFS provision can go into effect.

The budget includes language to make the amendment process as simple as possible without infringing on the existing gambling provisions within the compacts. Here are a few of the key points mentioned in the new proposal:

  • All financial obligations between tribes and the state remain unaltered.
  • Daily fantasy sports are not considered a form of gambling.
  • Equipment used for DFS shall not be considered gambling devices.

By including this language, it ensures that the gambling exclusivity rights of each tribe remain the same. Mohegan already has a partnership with FanDuel, where Mohegan Sun Connecticut players can enter their NFL Free Play contest for weekly prizes.

Once the General Assembly and the Interior sign off on compact amendments, the daily fantasy piece of the budget puzzle can go into effect. DFS regulations are expected to be set by the Commissioner of Consumer Protection no later than July 2018, which gives all parties plenty of time to amend agreements and push forward for sports betting in Connecticut.

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