Operators cool to proposed changes in state’s gaming laws
Digital gaming companies operating in the state are opposed to legislation that would prevent them from advertising financial enticements and prohibit gamblers from funding their online gaming activity with a jointly held debit or credit card account.
DraftKings and FanDuel, respective partners of the Mashantucket Pequot and Mohegan tribes, and Rush Street Interactive, the Connecticut Lottery Corp.’s partner, took similar positions last week during a public hearing conducted by the legislature’s Public Safety and Security Committee.
All three said certain proposed changes in the state’s gaming statutes would be virtually impossible to implement and could harm their business.
Senate Bill 971 comes nearly 16 months after the tribes’ casinos, Foxwoods and Mohegan Sun, began offering online casino gaming and, along with the lottery, online and retail sports betting. The need for “tweaks” in the statutes governing the new forms of gaming was inevitable, supporters of the proposed legislation say.
In written testimony provided to the committee, Rodney Butler, the Mashantucket chairman, described Connecticut’s 2021 expansion of gambling as a boon to both gaming operators and the state.
“I’m pleased to say that we have not only met the financial expectations around revenue, we have far surpassed the estimates,” Butler wrote.
From the launch of online casino gaming and sports betting in October 2021 through December 2022, the new forms of gambling generated $471 million in gross gaming revenue for the operators and $62.1 million in tax revenue for the state, according to Butler. Originally, it had been estimated that the tax revenues would reach $52.8 million by the 2026 fiscal year.
In November and December 2022, gross gaming revenues from the new forms of gambling were up 36% over the same two months in 2021, while tax revenue climbed 44%.
The digital gaming officials who testified Tuesday said passage of Senate Bill 971 would make Connecticut the only state to prohibit gamblers from funding their activity with joint debit and credit card accounts.
“DraftKings respectfully submits that no other jurisdiction in the United States has taken such a step because it is simply not possible for sports wagering operators to comply with such a requirement,” David Prestwood, DraftKings’ government affairs manager, told the committee. “At no point in the payment chain does any processor, network, or issuer return to the operator information about ownership of the account.”
Prestwood also said the provision could negatively impact those who may have a “responsible gaming problem.” It would force such individuals to open a sole account, which could enable and encourage them to hide their activity, he said.
Connecticut’s gaming statutes already limit gamblers to the use of one debit or credit card. Often, holders of joint accounts are spouses.
A supporter of the provision, state Rep. Dave Rutigliano, R-Trumbull, testified “it is outrageous” that a joint account holder could subject an unsuspecting spouse to “crushing debt.”
Michael Ventre, FanDuel’s state government relations lead for the Northeast, told committee members the bill’s ban on advertising promotional offers could have the unintended consequence of “incentivizing more Connecticut residents to use illegal sports betting apps,” as millions of Americans do.
“Advertising promotions is an effective tool to incentivize consumers to break-up with their bookie, and transition onto regulated platforms ― a goal that is in the best interest of the people of Connecticut,” Ventre’s written testimony reads. “... Every promotional advertisement that FanDuel creates has information on responsible gaming resources for individuals who consider themselves problem gamblers.”
Laura McAllister Cox, chief compliance officer for Rush Street Interactive, testified the proposed ban on financial enticements was too broad, raising legal concerns. She wrote that it’s unclear who the committee is seeking to protect and noted the state Department of Consumer Protection already has the authority to oversee promotions.
Senate Bill 971 bill also would allow DCP police officers to investigate offenses arising from the operation of retail sports wagering and would revise licensing requirements for certain employees of gaming operators.