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OLR Bill Analysis
sHB 6512
AN ACT CONCERNING CONSUMER PROTECTIONS FOR SPORTS
WAGERING.
SUMMARY
This bill regulates sports wagering contingent upon it becoming
legal in the state. The bill expressly provides that its sports wagering
provisions are not effective until (1) sports wagering outside of Indian
lands is permitted under the general statutes or a public or special act
and (2) the Department of Consumer Protection (DCP) commissioner
adopts specific regulations required by the bill.
Under the bill, “sports wagering” means risking or accepting
money, credit, deposit, or other thing of value for gain contingent in
whole or in part on (1) a sporting event or a portion of a sporting
event, or (2) the individual performance statistics of an athlete in a
sporting event or a combination of sporting events. It specifically
excludes paying an entry fee to play fantasy contests as defined in state
law.
The bill includes provisions restricting who may wager on sports
and places a number of requirements on sports wagering operators
including (1) requiring information in advertising for people who have
problems with gambling and (2) data security and confidentiality
requirements. It also requires operators to report to DCP, among other
things, any criminal proceedings against them or their employees and
information related to abnormal or illegal waging activities.
The bill also requires DCP to hire a consultant to study the
Connecticut Lottery Corporation (CLC) and issue recommendations. It
also eliminates a requirement that DCP adopt regulations to regulate
wagering on sporting events to the extent permitted by state and
federal law (CGS § 12-565a). 2021HB-06512-R000389-BA.DOCX
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EFFECTIVE DATE: Upon passage
RESTRICTIONS ON WAGE RS
The bill places several restrictions on who may place a sports wager
and the circumstances for doing so. Specifically, the bill prohibits:
1. anyone from placing a wager unless he or she is at least age 21
and physically present in the state when placing the wager;
2. sports wagering and electronic wagering platform operators,
their officers, directors, owners, and employees able to influence
their operations, as well as their family members who reside
with them, from placing any wager with the operator;
3. (a) athletes, coaches, and referees who take part in a sporting
event overseen by a sports governing body; (b) a sports
governing body’s employees holding positions of influence over
sporting events; (c) owners and employees of a sport governing
body’s member teams; and (d) bargaining unit personnel of a
sports governing body’s athletes or referees from placing a
wager on any sporting event overseen by the sports governing
body or holding an ownership interest in or exerting control
over any sports wager operator;
4. anyone with access to nonpublic, confidential information that
could affect a sporting event’s outcome from placing a wager on
that event;
5. anyone from placing a wager as an agent or a proxy for another;
and
6. an operator from paying a prize to anyone the operator knows
is prohibited from placing a wager based on the above
restrictions.
The bill defines a “sports governing body” as an organization that
prescribes final rules and enforces codes of conduct with respect to a
sporting event and its participants. Additionally, a “sporting event” 2021HB-06512-R000389-BA.DOCX
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means any sporting or athletic event (1) where two or more people
participate and receive compensation in excess of actual expenses for
their participation or (2) sponsored by an intercollegiate athletic
program of an institution of higher education. It also includes e-sports
but excludes horse racing and any minor league or high school-
sponsored sporting or athletic event.
REQUIREMENTS FOR SPO RTS WAGERING OPERATO RS
General Responsibilities
The bill requires each sports wagering operator to:
1. verify that anyone placing a wager through an electronic
wagering platform is not prohibited from doing so based on the
above restrictions (including by using any information known
by an operator, such as lists provided by relevant sports
governing bodies or DCP);
2. establish commercially and technologically reasonable measures
to verify identities and prohibit individuals from establishing
more than one account;
3. allow individuals to withdraw funds from their accounts and to
permanently close them upon their request;
4. publish all contractual terms, conditions, and rules applicable to
online wagering through the operator’s website or mobile
application and in-person wagering at the operator’s facilities;
and
5. develop and publish procedures allowing individuals to file
complaints with the operator in person, in writing, online, or by
other means about any aspect of the operator’s sports wagering.
Online Displays and Required Information in Advertising
Additionally, operators conducting online sports wagering must
conspicuously display on their website or mobile application:
1. links to (a) the protections afforded to them under the bill (the 2021HB-06512-R000389-BA.DOCX
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bill is not clear what exactly these are), (b) responsible gambling
information, and (c) information about the self-exclusion
process that operators must provide (see below);
2. a toll-free telephone number for obtaining problem gambling
information;
3. a clear display or periodic pop-up message of the amount of
time an individual has spent on the operator’s website or mobile
application;
4. a means to initiate a break in play to discourage excessive play;
and
5. a clear display of the amount of money available in individuals’
accounts.
Under the bill, sports wagering advertisements must include
information on available assistance for people who have, or are at risk
of having, problems with gambling. Relatedly, advertisements must
not:
1. depict someone younger than age 21, unless that person is a
professional athlete or a collegiate athlete who, pursuant to an
agreement with the advertiser, is able to profit from the use of
his or her name and likeness;
2. be aimed exclusively or primarily at individuals younger than
age 21;
3. promote irresponsible or excessive participation in sports
wagering; or
4. misrepresent the chances of winning or be misleading about
sports wagering outcomes.
Data Security and Confidentiality
The bill also requires operators to maintain the security of wagering
data, data on individuals placing wagers, and other confidential 2021HB-06512-R000389-BA.DOCX
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information to prevent unauthorized access to, and dissemination of,
that data and information. Operators must not (1) disclose or sell any
individual’s wagering information and (2) disclose records that
directly or indirectly identify an individual or his or her gambling
habits. However, operators must regularly share their wager records,
at the account level and in pseudonymous form, with DCP.
Responsible Gaming Policy
Under the bill, each operator must develop and publish a
responsible gaming policy that, at a minimum, must require the
operator to:
1. track its wagering activity at the account level;
2. provide training to employees to allow them to identify
wagerers who have problems with gambling; and
3. provide guidelines on how employees can respond
appropriately to an individual who (a) is in crisis or distress due
to problem gambling, (b) discloses that he or she may have a
problem with gambling, and (c) shares information about
another individual who may have a problem with gambling.
Self-Exclusion and Limitation Processes
The bill requires operators to allow any individual for a period of
time, presumably at the individual’s direction, to (1) exclude himself or
herself from placing a wager or (2) limit the amount of money he or
she may use to place wagers with the operator. Once an operator is
notified about an individual’s exclusion or limit, the operator must
take reasonable steps to prevent that person from placing a wager or
exceeding his or her limit.
While an exclusion or limit is in place, an operator may, at the
individual’s request, extend the time period of his or her exclusion or
limit or decrease the amount of the limit. An operator may not,
presumably independently, reduce the time period of an exclusion or
limit or increase the amount of a limit. 2021HB-06512-R000389-BA.DOCX
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Under the bill, operators must (1) publish information on how an
individual may exclude him or herself from betting or limit the
amount of money he or she bets and (2) conspicuously display that
information at any facility where they conduct in-person wagers and
on their websites or mobile applications if they conduct online wagers.
Reporting to DCP
Under the bill, operators must immediately report to the DCP
commissioner any information relating to:
1. criminal or disciplinary proceedings commenced against them
or their employees in connection with their operations;
2. abnormal wagering activity or patterns that may indicate a
concern with a sporting event’s integrity;
3. any other conduct that corrupts a sporting event’s wagering
outcome for financial gain, including match-fixing; and
4. suspicious or illegal wagering activities, including using funds
derived from illegal activity to place a wager, placing a wager to
conceal funds derived from illegal activity, using an agent or a
proxy to place a wager, or using false identification to place a
wager.
Other Requirements
The bill expressly prohibits operators from requiring an individual
to waive, as a condition for placing a wager, (1) any of the bill’s
provisions regulating sports wagering or (2) the rights to pursue legal
action or file a complaint with DCP. Lastly, operators must take
reasonable steps to prevent the conduct prohibited by the bill’s
provisions regulating sports wagering and to comply with any
regulations adopted by DCP (see below).
ACTIONS BY DCP
The bill authorizes the DCP commissioner to share with relevant
sports governing bodies any information it receives on abnormal
wagering activity or patterns and any other conduct that corrupts a 2021HB-06512-R000389-BA.DOCX
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sporting event’s wagering outcome.
The bill also requires the DCP commissioner to adopt regulations,
including emergency regulations (see BACKGROUND), to implement
the bill’s provisions and protect the public interest in the integrity of
sports wagering and reduce the dangers of unsuitable, unfair, or illegal
practices, methods, and activities in the conduct of sports wagering.
The regulations must include or address:
1. the types of sporting events that may be wagered on;
2. the minimum amount of cash reserves sports wagering
operators must maintain;
3. the acceptance of wagers on a series of sporting events;
4. the maximum wagers acceptable from an individual on any one
sporting event;
5. the type of wagering tickets that must be used;
6. the method of issuing tickets;
7. minimum accounting standards for operators;
8. the types of records an operator must maintain and make
available for inspection upon the commissioner’s request;
9. requirements for information and reports from operators to
enable effective auditing;
10. requirements for establishing and funding a sports wagering
account;
11. minimum qualifications for a provider of sporting events data;
12. minimum requirements to ensure the security and integrity of
an electronic wagering platform and collection of information
and reports to enable effective oversight; 2021HB-06512-R000389-BA.DOCX
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13. the regular sharing of account level records with DCP;
14. displays and messages on an operator’s sports wagering
website or mobile application aimed at combatting problem
gambling; and
15. the advertising of sports betting, including ensuring compliance
with the bill’s above advertising requirements and requiring
information on gambling addiction or links to websites with
resources related to gambling addiction be included.
CLC STUDY
By October 1, 2021, DCP must issue a request for proposals for a
consultant to study CLC. Under the bill, this study must examine (1)
CLC’s organizational structure, operations, and finances and (2) the
regulatory relationship between the corporation, its board of directors,
and DCP.
In selecting a consultant, the bill requires DCP to give preference to
respondents who have:
1. a demonstrated understanding of how laws and regulations
affect corporate culture and operations;
2. experience in creating and maintaining a business culture that
ensures regulatory compliance, including an understanding of
how corporate managers and board members can use different
strategies to encourage such a culture;
3. familiarity with lottery operations; and
4. experience analyzing business management and operational
structures, including an ability to assess a corporation’s
financial commitment to staff development, security, and
technological safeguards and innovation.
The consultant must submit a report of recommendations to DCP,
CLC, and the Public Safety and Security Committee by October 1, 2022. 2021HB-06512-R000389-BA.DOCX
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Under the bill, the report may include recommendations to:
1. improve the security and integrity of lottery games and any
other forms of gaming conducted by CLC;
2. create a culture within CLC that encourages compliance with
the law governing it and its activities;
3. promote transparency and accountability to the public in the
CLC’s operations and activities;
4. improve CLC’s internal operations, in order to enhance
revenue, promote innovation, appropriately invest in staff
development, and focus on technological enhancements,
security and gaming integrity, and customer service;
5. use metrics to regularly review the performance of the CLC’s
president and other executive staff to promote transparency,
improved communications, customer service, and regulatory
compliance in its operations;
6. strengthen and improve the regulatory oversight of DCP;
7. strengthen communication and transparency between CLC, its
board, and DCP; and
8. develop a strategic plan focusing on CLC’s internal operations,
investment in technology and system security, revenue growth,
customer service, relationships with lottery retailers, portfolio of
gaming activities, responsible gambling education and
outreach, innovation, gaming integrity, and regulatory
compliance.
BACKGROUND
Emergency Regulations
By law, an agency may adopt an emergency regulation either
without prior notice and hearing or with an abbreviated notice and
hearing process. The regulation is effective for up to 180 days from the
date it is approved and posted online, with limited exceptions. 2021HB-06512-R000389-BA.DOCX
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Regulations, including emergency regulations, are generally effective
when the secretary of the state posts them on the eRegulations system
(CGS § 4-168).
Related Bills
sHB 6451, reported favorably by the Public Safety and Security
Committee, among other things, establishes or modifies current
frameworks for legalizing and regulating (1) online sports wagering,
(2) retail sports wagering (i.e., wagering while physically present at a
facility), (3) online casino gaming, (4) online keno, (5) online lottery
draw games other than keno, and (6) fantasy contests.
sSB 146, reported favorably by the Public Safety and Security
Committee, among other things, expands (1) grants to municipalities
from the Mashantucket Pequot and Mohegan Fund and (2) funding for
the state’s debt-free community college program. These expansions are
contingent on the legalization of and revenue generated from,
respectively, (1) sports wagering and online casino gaming outside of
Indian lands and (2) online lottery draw games.
sSB 570, reported favorably by the Public Safety and Security
Committee, contains many of the same provisions in this bill, sSB 146,
and sHB 6451 but also (1) authorizes a request for proposals to
establish a casino gaming facility in Bridgeport, (2) requires that online
casino gaming or sports wagering equipment must be in a facility
located in Bridgeport, and (3) prevents the tribes from using a third-
party vendor to operate their skins for online sports wagering and
casino gaming unless the legislature approves the contract.
COMMITTEE ACTION
Public Safety and Security Committee
Joint Favorable Substitute
Yea 23 Nay 1 (03/24/2021)