Connecticut AG warns on daily fantasy sports approval

The Connecticut Attorney General may have thrown a major spanner in the daily fantasy sports approval works Monday with his warning that legislation allowing the vertical to operate in the state presents a danger to Connecticut’s lucrative revenue-sharing compact with two tribal land casino groups.

AG George Jepsen’s opinion was requested earlier this year by two leading politicians (see previous report), and emphasises that there is a “high degree of uncertainty” regarding whether skill or chance predominates in DFS competitions.

Authorising DFS has the potential to violate the agreements with the tribes if played on a device the tribes consider to be a video facsimile, or if the tribes consider fantasy sports to be a casino game, he opined.

The Associated Press news agency reports that the Mashantucket Pequot and Mohegan Tribal Nations have exclusive rights to operate video facsimile games in exchange for providing the state with 25 percent of the revenues, an arrangement through which the state receives more than $250 million annually from the Mohegan Sun and Foxwoods Resorts Casinos in the state.
The AG’s view resulted in an immediate cool-off by state Senate President Martin Looney, who responded by observing that the opinion points to the potential, substantial risk that state regulation of daily fantasy sports could have on the agreement with the tribes.

“Due to the risk and uncertainty that would result from a potential legal challenge, the prospect of passing legislation this session is unlikely,” Looney said.

The DFS bill currently progressing through the state House of Assembly Finance Revenue and Bonding Committee proposes the imposition of fees on fantasy sports operators that include an 8.75 percent surcharge on total entry fees.

It prescribes consumer protection regulations which the state’s Department of Consumer Protection would be tasked to draft, and specifically excludes DFS from the state definition of gambling.

Whilst the tribes have not thus far opposed the legislation, they have flagged the need for consultation with them.