Daily fantasy sports tucked into approved state budget

A provision buried deep in the two-year budget Gov. Dannel P. Malloy signed last week — Section 649, to be exact — calls for the commissioner of the state Department of Consumer Protection to adopt regulations regarding “the operation of, participation in and advertisement of fantasy contests in the state.”

Such regulations, the law says, shall protect those who pay fees to engage in fantasy contests — commonly known as daily fantasy sports — from unfair or deceptive acts or practices. Fantasy sports participants compete by assembling teams of real-world professional athletes and accumulating points based on the statistics the athletes generate in actual competition.

Under Section 649, the daily fantasy sports regulations shall prohibit participation among those under 18 and protect the funds players deposit with fantasy contest operators. Such operators — DraftKings and FanDuel are two of the best known — would have to pay annual registration fees of $15,000, except that the commissioner shall reduce the fees to ensure they don’t exceed 10 percent of an operator’s gross receipts.

All of it is contingent on the say-so of the Mashantucket Pequot and Mohegan tribes, respective owners of Foxwoods Resort Casino and Mohegan Sun. When bills legalizing daily fantasy sports first surfaced in 2016, state Attorney General George Jepsen cautioned that the legislation could jeopardize the state’s exclusive revenue-sharing agreements with the tribes.

“We look forward to hearing more about what is proposed,” Chuck Bunnell, the Mohegan Tribe’s chief of staff, said in the wake of the state budget’s passage.

The budget’s language specifies that the tribes’ gaming agreements with the state would have to be amended to reflect the authorization of daily fantasy sports. Amended agreements would have to guarantee that such authorization does not relieve the tribes of their obligation to contribute a share of their casinos’ slot-machine winnings to the state. 

The amended tribal-state agreements would have to be approved, or deemed approved, by the secretary of the U.S. Department of the Interior.

A number of states have passed legislation in recent years to regulate fantasy sports contests, including many in the Northeast. Connecticut’s neighbors — Massachusetts, New York and Rhode Island — are among the states that specifically allow fantasy sports contests, as are New Jersey and, most recently, Pennsylvania, which a week ago approved the regulation and taxation of daily fantasy sports betting as part of a sweeping expansion of casino-style gambling.

b.hallenbeck@theday.com

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