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OLR Bill Analysis
sSB 570
AN ACT AUTHORIZING A TRIBAL RESORT -CASINO IN
BRIDGEPORT, SPORTS WAGERING, ONLINE CASINO GAMING
AND ONLINE LOTTERY.
SUMMARY
This bill 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. These frameworks are subject to several
conditions, principally that the governor must first enter into specific
contractual agreements with the Mashantucket Pequot and Mohegan
tribes. These agreements must then be approved or deemed approved
by the U.S. Department of Interior (DOI) secretary, pursuant to the
federal Indian Gaming Regulatory Act (IGRA) and its implementing
regulations.
The bill generally authorizes the tribes and the Connecticut Lottery
Corporation (CLC) to operate these games subject to specific
requirements, including that all but the online keno and lottery draw
game authorizations be limited to an initial 10-year period with an
option for a five-year renewal.
The bill specifically allows the tribes to conduct the following
wagering and gaming: on Indian lands, retail and online sports
wagering as well as fantasy contests; outside Indian lands, one skin for
online sports wagering, one skin for online casino gaming, and fantasy
contests. (Under the bill, a “skin” is a brand or cobranded name and
logo on a website or mobile application for enabling online sports
wagering and online casino gaming.)
Under the bill, CLC is authorized to conduct retail and online sports
wagering, online keno, and online lottery draw games. It may 2021SB-00570-R000396-BA.DOCX
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specifically conduct retail sports wagering at up to fifteen facilities,
which may be licensed off-track betting (OTB) facilities (i.e., Sportech
Venues, Inc.) pursuant to an operating agreement.
The bill requires payments to the General Fund ranging from
13.75% to 20% of gross revenues from sports wagering and online
casino gaming, delays the authorization for an off-reservation casino
gaming facility in East Windsor for 10 years, authorizes a request for
proposals to establish a casino gaming facility in Bridgeport, and
expands funding for the state’s debt-free community college program.
Lastly, the bill makes technical and conforming changes.
EFFECTIVE DATE: July 1, 2021, except provisions related to debt-
free community college (§§ 20 & 26) and the repealer section (§ 41) are
effective upon passage.
MAIN PROVISIONS OF GENERAL APPLICABILITY
§ 1 — Definitions
Under the bill, “sports wagering” means risking or accepting any
money, credit, deposit, or other thing of value for gain contingent in
whole or in part on (1) all or part of a sporting event, including future
or propositional events during the sporting event, or (2) the individual
performance statistics of an athlete or athletes in a sporting event or
combination of events. It may be done by any system or method of
wagering, including in-person or over the Internet through a website
or mobile device. “Sports wagering” does not include the entry fees for
fantasy contests or e-sports.
“Sporting event” 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 a higher
education institution’s intercollegiate athletic program. It also includes
e-sports (i.e., electronic sports and competitive video games played as
a game of skill) but excludes horse racing or a minor league-sponsored
sporting or athletic event.
“Online casino gaming” means the following games conducted over 2021SB-00570-R000396-BA.DOCX
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the Internet: (1) slots, blackjack, craps, roulette, baccarat, poker and
video poker, bingo, live dealer, and other peer-to-peer games, and any
variations of them and (2) any games authorized by the Department of
Consumer Protection (DCP).
“Keno” is a lottery game where a subset of numbers is drawn from
a larger field of numbers by a central computer system using an
approved number generator, wheel system device, or other drawing
device.
“Lottery draw game” is any game (excluding keno) where one or
more numbers, letters, or symbols are randomly drawn at
predetermined times from a range of numbers, letters, or symbols; and
prizes are paid to players possessing winning plays, as set forth in each
game’s official game rules.
“Fantasy contest” does not include lottery games and is any online
fantasy or simulated game or contest in which:
1. players pay an entry fee;
2. the value of all prizes and awards offered to winners is
established and made known to players before the game or
contest;
3. all winning outcomes reflect player knowledge and skill and are
determined predominantly by accumulated statistical results of
individual performance, including athletes in sporting events;
and
4. the winning outcome is not based on the score, point spread, or
any performance of any single actual team or combination of
teams or solely on any single performance of an individual
athlete or player in a single actual sporting event.
Relatedly, a “fantasy contest operator” is a person or entity that is
licensed to operate and offer fantasy contests to members of the
general public in the state. 2021SB-00570-R000396-BA.DOCX
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§ 2 — State-Tribal Agreements
The bill authorizes the governor to enter into (1) amendments to the
existing Mashantucket Pequot procedures, Mohegan compact, and
related memoranda of understanding (MOUs) with each tribe (see
BACKGROUND) and (2) new compacts with the tribes (“State-Tribal
agreements”). These agreements must contain a series of five multi-
part provisions.
First, they must permit each tribe to conduct, on Indian lands, retail
sports wagering and fantasy contests. Online sports wagering must
also be permitted, so long as the wagers are placed by people
physically present on Indian lands.
Second, the agreements must provide that they will not terminate
the existing video facsimile moratorium and do not relieve the tribes
from their obligations to contribute a percentage of their gross
operating revenues from video facsimile games to the state as
provided in each tribe’s MOU (see BACKGROUND) . This second
provision applies if state law at any time authorizes (1) each tribe to
operate, outside of Indian lands, one skin for online sports wagering,
one skin for online casino gaming, and fantasy contests; (2) a license to
operate fantasy contests outside of Indian lands; and (3) CLC to
operate certain games. These games are as follows:
1. retail sports wagering at up to 15 facilities throughout the state,
any number of which may be located at OTB facilities, so long
as a facility is not located within 25 miles of Indian lands;
2. one skin for online sports wagering outside of Indian lands, so
long as the skin (a) is not operated or co-branded with a tribal or
commercial casino owner or operator and (b) does not promote
or market retail commercial casino gaming of any kind;
3. a program to sell lottery tickets for lottery draw games through
its website, online service, or mobile application, so long as
lottery drawings occur regularly and not more frequently than
once every four minutes; and 2021SB-00570-R000396-BA.DOCX
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4. keno, both through lottery sales agents and through its website,
online service, or mobile application, so long as drawings occur
not more than once every three minutes and the state pays each
tribe of 12.5% of the gross gaming revenue from keno.
Third, the State-Tribal agreements must generally provide that
agreement provisions will be valid for a 10-year initial term with an
option for a five-year renewal term if mutually consented to and
exercised by the governor and both tribes. The bill exempts from this
requirement the provisions above related to the video facsimile
moratorium and contributions if state law authorizes the above
changes to lottery draw games and keno.
Fourth, the State-Tribal agreements must also contain a cessation
provision that ends a tribe’s authority to conduct online sports
wagering, online casino gaming, and fantasy contests outside of Indian
lands if the tribe operates E-bingo machines on Indian lands as
authorized under IGRA at any time during the 10-year initial term of
the agreements. Under the bill, ending one tribe’s authority under this
provision does not affect the authorization of the other tribe or CLC to
conduct activities authorized under the agreements.
Fifth, and lastly, the State-Tribal agreements must contain a
provision ending their effectiveness if the following provisions are
held invalid by a court of competent jurisdiction in a non-appealable
final judgment:
1. any provision of the agreements, excluding those related to the
video facsimile moratorium and contributions if state law
authorizes the above changes to lottery draw games and keno;
or
2. any of the bill’s provisions, excluding those about keno through
lottery sales agents and online lottery draw games.
Under existing state law, both houses of the legislature must
approve a tribal-state compact (CGS § 3-6c). However,
notwithstanding that law, the bill provides that the State-Tribal 2021SB-00570-R000396-BA.DOCX
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agreements described above must be considered approved under that
law once the governor enters into the agreements or renewals without
any further action by the legislature.
Under the bill, the State-Tribal agreements are effective and final
once approved by the DOI secretary. But if her approval is overturned
by a court of competent jurisdiction in a non-appealable final
judgement, then the bill’s provisions cease to be effective.
§ 40 — General Severability Provision
Under existing law, if any provision of an act or its application is
held invalid, then its invalidity must not affect other provisions or
applications of the act (CGS § 1-3). However, notwithstanding that
law, the bill provides that if any provision of the bill, except provisions
on keno and online lottery draw games, is held invalid by a court of
competent jurisdiction in a non-appealable final judgment, then all
provisions in the bill except those on keno and online lottery draw
games will cease to be effective.
§§ 7 & 41 — DCP Regulations
The bill requires the DCP commissioner to adopt regulations, to the
extent not prohibited by federal law or any IGRA-related agreement,
to implement specific bill provisions on retail and online sport
wagering, online casino gaming, online keno, and online lottery. The
regulations must address (1) the operation of, participation in, and
advertisement of sports wagering, online casino gaming, keno, and
online lottery; (2) the designation of additional games that may be
permitted as online casino gaming; and (3) any other provisions to
protect the public interest in the integrity of gaming.
Relatedly, the bill also eliminates the requirement that DCP adopt
regulations to regulate wagering on sporting events to the extent
permitted by state and federal law (CGS § 12-565a). To date, DCP has
not adopted such regulations.
SPECIFIC REQUIREMENT S FOR EACH GAME TYPE
§§ 3 & 8 — Online Sports Wagering by the Tribes 2021SB-00570-R000396-BA.DOCX
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The bill authorizes the DCP commissioner to issue a license to each
tribe to operate one skin for online sports wagering within the state
(presumably, outside of Indian lands) if: (1) the State-Tribal
agreements are effective, (2) related DCP regulations adopted under
the bill are effective, and (3) it is operated according to the bill’s
requirements (see below).
The bill requires a tribe’s license to expire (1) upon the expiration of
the State-Tribal agreements’ initial or renewal period or (2) if a tribe
operates E-bingo machines on Indian lands at any time during the 10-
year initial term of the agreements. Additionally, the bill authorizes
each tribe to enter into an agreement with a person or entity to provide
skin services.
§§ 4 & 27 — Online Sports Wagering by CLC
The bill authorizes CLC to operate one skin for online sports
wagering if: (1) the State-Tribal agreements are effective, (2) related
DCP regulations adopted under the bill are effective, and (3) it is
operated according to the bill’s requirements (see below). Under the
bill, CLC may enter into agreements with vendors to provide skin
services, so long as they (1) are not branded along with a casino
operator operating in any jurisdiction and (2) do not directly or
indirectly promote a casino that operates in another jurisdiction,
including through awarding players’ points; free play; promotions; or
other marketing activities. If CLC enters an agreement with a vendor
that is owned by a casino operator, the vendor may not share any
customer information with the operator for purposes of marketing or
any other purposes related to acquiring customers. Under the bill,
CLC’s authority to operate online sports wagering must expire upon
the expiration of the State-Tribal agreements’ initial or renewal period.
§§ 4-5 & 30 — Retail Sports Wagering by CLC
The bill authorizes CLC to operate certain retail sports wagering if:
(1) the State-Tribal agreements are effective, (2) related DCP
regulations adopted under the bill are effective, and (3) it does so
according to the bill’s requirements (see below). CLC may specifically
provide retail sport wagering at up to 15 facilities located throughout 2021SB-00570-R000396-BA.DOCX
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the state, so long as none of the facilities are located within 25 miles of
Indian lands. The bill specifically permits CLC to develop new
facilities in Bridgeport and Hartford.
Relatedly, the bill authorizes CLC to enter into one or more
agreements with OTB operators to operate retail sports wagering and
extends the bill’s requirements to them. Under the bill, OTB facilities
that conduct retail sports wagering count towards CLC’s 15-facility
cap.
The bill extends to retail sports wagering facilities existing law
requiring certain gaming-related places outside of Indian lands to
display DCP-prepared informational materials. The materials must
inform the public of the programs available for the prevention,
treatment, and rehabilitation of compulsive gamblers.
Under the bill, CLC’s authority to operate retail sports wagering
must expire upon the expiration of the State-Tribal agreements’ initial
or renewal period. If operating agreements are made with OTB
facilities, those agreements must adhere to this same expiration
schedule.
§ 3 — Online Casino Gaming by the Tribes
The bill authorizes the DCP commissioner to issue a license to each
tribe to operate one skin for online casino gaming in the state
(presumably, outside of Indian lands) if: (1) the State-Tribal
agreements are effective, (2) related DCP regulations adopted under
the bill are effective, and (3) it is operated according to the bill’s
requirements (see below). The bill requires such a tribe’s license to
expire (1) upon the expiration of the State-Tribal agreements’ initial or
renewal period or (2) if a tribe operates E-bingo machines on Indian
lands at any time during the 10-year initial term of the agreements.
Additionally, the bill authorizes each tribe to enter into an agreement
with a person or entity to provide skin services.
§§ 1, 4, 18 & 21 — Online Keno by CLC
Under current law, CLC exclusively operates keno in Connecticut 2021SB-00570-R000396-BA.DOCX
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outside of Indian lands pursuant to memoranda of agreement (MOAs)
with each tribe (CGS §§ 12-806 & -806d). CLC’s keno is currently
played by purchasing paper tickets from lottery sales agents as both
the agreements and current law prohibit playing keno through a video
facsimile machine (e.g., through a computer). Current law specifically
excludes games operated on a video facsimile machine from the
current statutory definition of “keno.” The bill eliminates that
exclusion.
Relatedly, the bill authorizes CLC to operate keno through its
website, online service, or mobile application if the State-Tribal
agreements and related DCP regulations adopted under the bill are
effective. Additionally, CLC must develop an electronic platform or
combination of hardware, software, and data networks used to
manage, administer, offer, or control keno over the Internet, including
through a website or a mobile device, to, at a minimum: (1) verify that
keno account holders are at least 18 years old and located in the state;
(2) provide a mechanism to prevent the unauthorized use of a keno
account; and (3) maintain the security of data and other confidential
information. CLC must also limit drawings to no more than once every
three minutes.
Under the MOAs, the state must distribute to each tribe 12.5% of the
“gross operating revenues” (i.e., total sum wagered, less amounts paid
out as prizes) from CLC’s current operation of keno. Under the bill, the
state must make similar payments to each tribe, specifically 12.5% of
“gross gaming revenue from keno,” in relation to CLC’s expanded
keno operations. Under the bill, “gross gaming revenue from keno”
means the total of all sums received by CLC from operating keno both
through lottery sales agents and through CLC’s website, online service,
or mobile application, less the total of all sums paid as winnings to
patrons and any federal excise tax applicable to such sums received,
subject to certain conditions. For purposes of calculating winnings, the
bill excludes merchandise or other things of value included in a
jackpot or payout. The bill also generally excludes from the calculation
of gross gaming revenue coupons or credits issued to and played by
patrons under a promotional program, so long as the aggregate 2021SB-00570-R000396-BA.DOCX
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amount does not exceed the following limits:
1. 25% of gross gaming revenue for any month during the first
year keno operates under the bill,
2. 20% of gross gaming revenue for any month during the second
year keno operates under the bill, or
3. 15% of gross gaming revenue for any month during the third or
succeeding year keno operates under the bill.
If coupons or credits exceed these limits, the bill requires 25% of the
applicable excess face amount of coupons or credits used in the
calendar month to be included in the calculation of gross gaming
revenue.
§§ 4 & 22 — Online Lottery by CLC
The bill authorizes CLC to operate a program to sell lottery tickets
for lottery draw games through CLC’s website, online service, or
mobile application if the State-Tribal agreements and related DCP
regulations adopted under the bill are effective. Additionally, CLC
must:
1. sell the tickets through the program regularly and not more
frequently than once every four minutes;
2. submit to the DCP commissioner official game rules for each
lottery draw game that CLC seeks to offer through the program
and not offer a lottery draw game through the program until the
DCP commissioner approves, in writing, the official rules for a
game;
3. verify that a person who establishes an online lottery account to
purchase a lottery ticket through the program is at least 18 years
old and is located in the state;
4. limit lottery ticket sales to ones initiated and received within the
state; 2021SB-00570-R000396-BA.DOCX
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5. require the program to (a) allow a person to establish an online
lottery account and use a credit card, debit card, or verified
bank account to purchase lottery tickets through the account; (b)
limit a person with an online lottery account to the use of only
one debit card or credit card; and (c) provide that any money in
an online lottery account belongs solely to the account owner
and may be withdrawn by the owner;
6. establish a voluntary self-exclusion process to allow a person to
exclude himself or herself from establishing an online lottery
account or purchasing a lottery ticket through the program;
7. subject the program to an independent review for responsible
play as assessed by industry standards at least every five years;
8. require the program to provide responsible gambling and
problem gambling information;
9. limit the amount of money a person may (a) deposit into an
online lottery account and (b) spend per day through the
program; and
10. display the results of lottery draw game drawings on CLC’s
website, online service, or mobile application, so long as the
lottery draw game drawings do not take place on CL C’s
website, online service, or mobile application.
After establishing its online lottery program, the bill requires CLC
to conduct a public awareness campaign to educate the public on
responsible gambling and inform them of available programs that
prevent, treat, and rehabilitate compulsive gamblers in Connecticut.
Additionally, CLC may implement initiatives to promote purchasing
lottery tickets through lottery sales agents and online lottery draw
games.
Relatedly, the bill also authorizes CLC to advertise lottery games on
its website, online service, or mobile application. CLC may also offer
interactive lottery games for promotional purposes through its 2021SB-00570-R000396-BA.DOCX
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website, online service, or mobile application, so long as (1) there is no
cost to play the game; (2) no prizes or rewards of any monetary value
are given for playing; and (3) no lottery ticket purchase is required to
play.
§ 16 — Fantasy Contests
Current law establishes a framework for legalizing and regulating
fantasy contests under which prospective fantasy contest operators
register with DCP. However, to date, the necessary conditions for that
framework to go into effect have not been satisfied. Current law
specifically requires State-Tribal agreements that authorize fantasy
contests. The bill eliminates that requirement and makes several
conforming changes to modify the framework from a registration to a
licensing system. Specifically, the bill allows the DCP commissioner to
issue licenses to operate fantasy contests outside of Indian lands if the
State-Tribal agreements under the bill go into effect.
Current law required the DCP commissioner to adopt regulations
by July 1, 2018, on the operation of, participation in, and advertisement
of fantasy contests in Connecticut. The bill specifies that these
regulations must also address fantasy contest licensing and extends the
due date for their adoption to January 1, 2022. Under existing law and
unchanged by the bill, the regulations must protect players who pay
an entry fee to play fantasy contests from unfair or deceptive acts or
practices; violations are subject to a fine of up to $1,000 per violation.
The regulations must also include:
1. a prohibition against operators allowing anyone under age 18 to
participate in a contest they operate,
2. protections for the players’ funds on deposit with the operators,
3. truthful advertising requirements for operators,
4. procedures to ensure the integrity of fantasy contests offered by
operators,
5. procedures to ensure operators provide players with (a) 2021SB-00570-R000396-BA.DOCX
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information on responsible playing and where they can seek
assistance for addictive or compulsive behavior and (b)
protections against compulsive behavior, and
6. reporting requirements and procedures to demonstrate
eligibility for reducing the initial licensing fee and annual
licensing renewal fee.
Under the bill, the initial and annual fees for a license are the same,
$15,000, as under current law for registrations. Additionally,
provisions requiring the DCP commissioner to reduce an operator’s
registration fees so that the fees do not exceed 10% of the operator’s
gross receipts for the registration period are carried forward for
licenses.
The bill requires all fantasy contest operator licenses to expire upon
the expiration of the State-Tribal agreements’ initial or renewal period.
Additionally, if either tribe holds a license, the bill requires the license
to expire if the tribe operates E-bingo machines on Indian lands at any
time during the 10-year initial term of the agreements.
§§ 13, 17 & 41 — Off-Reservation Casino Gaming Facilities
Current law authorizes the operation of an off-reservation casino
gaming facility in East Windsor, Connecticut by MMCT Venture, LLC,
which is a company jointly owned and operated by the Mashantucket
Pequot and Mohegan tribes. The bill delays this authorization through
the 10-year initial term of the bill’s State-Tribal agreements.
Additionally, the bill repeals a provision requiring MMCT to provide a
$30 million, interest-free advance to the state by June 30, 2019 (CGS §
12-578j). To date, MMCT has not submitted the advance.
The bill further authorizes MMCT to issue a request for proposals to
the city of Bridgeport for establishing a casino gaming facility in the
city. Under the bill, a request must include a description of the needs
of MMCT towards establishing and carrying on the business of a
casino gaming facility. The bill authorizes Bridgeport to respond to a
request and enter into a development agreement with MMCT to 2021SB-00570-R000396-BA.DOCX
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establish a casino gaming facility in the city.
The bill allows a casino gaming facility established in Bridgeport to
conduct certain authorized games, as is the case under existing law for
the facility in East Windsor. Under current law, “authorized games”
means any game of chance, including blackjack; poker; dice; money-
wheels; roulette; baccarat; chuck-a-luck; pan game; over and under;
horse race game; acey-deucy; beat the dealer; bouncing ball; video
facsimile games; and any other game of chance the DCP commissioner
authorizes. The bill redefines “authorized games” to expressly exclude
sports wagering as it is defined in the bill.
PROVISIONS AFFECTING MULTIPLE GAME TYPES
§§ 1 & 6 — Age Monitoring and Restrictions
Under the bill, only people who are at least 21 years old and
physically present in the state may place wagers through online sports
wagering, retail sports wagering, and online casino gaming operations
that are conducted outside of Indian lands. Relatedly, any online
sports wagering or online casino gaming operator’s electronic
wagering platform must (1) verify that respective account holders are
at least 21 years old and physically present in the state when placing a
wager; (2) provide a mechanism to prevent the unauthorized use of an
account; and (3) maintain the security of data and other confidential
information. Under the bill, an “electronic wagering platform” refers to
hardware, software, and data networks used to manage, administer,
offer, or control online sports wagering or commercial casino gaming,
including through a website or mobile device.
§ 11 — Equipment Location
The bill requires that any equipment, including the electronic
wagering platform, that supports online casino gaming or sports
wagering must be in a facility located in Bridgeport unless the
equipment is located on Indian lands. Any personnel needed to
support the equipment must be assigned to the facility.
§ 12 — Skin Vendors for the Tribes
The bill prevents the tribes from using a third-party vendor to 2021SB-00570-R000396-BA.DOCX
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operate their skins for online sports wagering and casino gaming
unless they file a request with the House and Senate clerks and have it
approved by the legislature. Under the bill, a request must contain the
agreement terms with the prospective vendor.
If the request is filed during a regular session, the legislature has
until the session’s adjournment to approve or reject it. Alternatively, if
the request is not filed during a regular session, the legislature has
until adjournment of (1) the next regular session or (2) a special session
convened to act on the request. If the legislature does not act by
adjournment, the request is deemed rejected.
However, if the request is filed within 30 days of the end of a
regular session, the legislature can either (1) convene in a special
session and vote within 30 days or (2) vote on it within the first 30 days
of its next regular session. The legislature has until the end of either 30
day-period to vote before the measure is considered rejected.
The legislature may approve a request by a majority vote of each
chamber or reject it by a majority vote of either chamber. If a request is
rejected, it is not valid and must not be implemented.
§§ 8, 19-21, 26, 28 & 39 — General Fund Payments & Transfers;
Taxes
Under the bill, the following entities must pay to the General Fund
13.75% of their respective “gross gaming revenue from sports
wagering” from the following sources:
1. each tribe from the online sports wagering it operates outside of
Indian lands,
2. CLC from both its retail and online sports wagering, and
3. any OTB facility under an agreement with CLC from its retail
sports wagering.
In all instances, the entities must make their payments not later than 30
days after the date they begin operations and on a monthly basis
afterwards. 2021SB-00570-R000396-BA.DOCX
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For online casino gaming conducted outside Indian lands, each tribe
must pay to the General Fund 18% of its “gross gaming revenue from
online casino gaming” during the first five years of operation and then
20% during the sixth and any succeeding year of operation. Payments
must be made not later than 30 days after the date they begin
operations and on a monthly basis afterwards.
The bill establishes the same formulas for calculating gross gaming
revenue for sports wagering and online casino gaming as for keno.
Under the bill, gross gaming revenue for both activities is the total of
all sums received, less the total of all sums paid as winnings to patrons
and any federal excise tax applicable to such sums received, subject to
certain conditions. Like keno revenue, for purposes of calculating
winnings, the bill excludes merchandise or other things of value
included in a jackpot or payout. It also generally excludes from the
calculation of gross gaming revenue coupons or credits issued to and
played by patrons under a promotional program, as long as the
aggregate amount does not exceed the following limits:
1. 25% of gross gaming revenue for any month during the first
year the activity operates,
2. 20% of gross gaming revenue for any month during the second
year the activity operates, or
3. 15% of gross gaming revenue for any month during the third or
succeeding year the activity operates.
If coupons or credits exceed these limits, the bill requires 25% of
their applicable excess face amount used in the calendar month to be
included in the calculation of gross gaming revenue.
After payment into the General Fund, the bill requires that 10% of
the tribes’ payments from the online sports wagering they operate
outside of Indian lands or $20 million, whichever is less, be transferred
from the General Fund each fiscal year to the statewide tourism
marketing account. 2021SB-00570-R000396-BA.DOCX
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Additionally, the bill makes modifications to the Mashantucket
Pequot and Mohegan Fund based on the above payments. Under
current law, the Mashantucket Pequot and Mohegan Fund receives
transfers from the General Fund each fiscal year, based on deposits
from tribal casino video facsimile revenue that the state receives
pursuant to MOUs with each tribe. The transfers must equal the
amount appropriated for specific grants to municipalities. Money from
the fund must then be distributed to municipalities according to
various statutory formulas or amounts and grant criteria.
The bill sunsets the current transfer methodologies associated with
the fund as of June 30, 2021. Beginning FY 22 and each of the following
fiscal years, the bill requires that $137 million be transferred from the
General Fund to the Mashantucket Pequot and Mohegan Fund based
on the revenues from (1) the tribes’ online sports wagering and casino
gaming conducted outside of Indian lands; (2) CLC’s online and retail
sports wagering; (3) retail sports wagering at OTB facilities under
agreements with CLC; and (4) tribal casino video facsimiles. Under the
bill, this transfer amount may only be reduced by (1) an emergency
certification from the governor requiring a reduction and (2) a vote of
at least two-thirds of each General Assembly chamber approving the
reduction.
Under existing law and unchanged by the bill, the Office of Policy
and Management (OPM) must distribute the funds according to those
specified amounts, reducing them proportionally if the grant total
exceeds the amount of funds available for a year. By law, the amounts
are paid in three installments on or before January 1, April 1, and June
30.
The bill specifies that CLC’s operation of gaming authorized under
the bill is considered performing an essential government function,
and this operation must be free from any taxes, as is the case under
current law for existing games. By law, CLC must transfer to the
General Fund on a weekly basis any balance of the lottery revenues
that exceeded the corporation’s needs for paying lottery prizes and
meeting operating expenses and reserves, with an exception for 2021SB-00570-R000396-BA.DOCX
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payments to instead be directed to the Connecticut Teachers’
Retirement Fund Bonds Special Capital Reserve Fund in certain
circumstances (CGS § 12-812).
However, the bill requires that all revenue from CLC’s online lottery
program must be deposited into a fund CLC must establish to
specifically collect that revenue, separate from all other CLC revenues.
The bill requires the CLC president, on a weekly basis, to estimate and
certify to the state treasurer the portion of the balance in this fund that
exceeds CLC’s current needs for paying prizes and current operating
expenses and funding approved CLC reserves. Under the bill, CLC
must, after being notified that the state treasurer received the
certification, transfer the certified amount to a “debt-free community
college account,” which the bill establishes as a separate, nonlapsing
account within the General Fund.
The bill requires the Board of Regents for Higher Education (BOR)
to spend the money in the debt-free community college account on the
state’s debt-free community college program. (The 2019 state budget
implementer established a debt-free community college program for
certain Connecticut high school graduates who enroll as first-time, full-
time regional community-technical college students (PA 19-117, §
362).) Additionally, within 30 days after the online lottery program
starts, and on each January 1 thereafter, the CLC president must
estimate and report to BOR the anticipated amount to be deposited in
the account or the anticipated net revenue during the current and next
fiscal year.
Existing law, unchanged by the bill, imposes a 10.5% tax on the
gross receipts of each fantasy contest operator, which must be reported
and remitted to the Department of Revenue Services commissioner.
“Gross receipts” means the total of all entry fees collected by an
operator from all players, less the total amount paid out as prizes to
players, multiplied by the location percentage. “Location percentage”
means the percentage rounded to the nearest tenth of a percent of the
total entry fees collected from players located in Connecticut, divided
by the total entry fees collected from all players in fantasy contests 2021SB-00570-R000396-BA.DOCX
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(CGS §§ 12-578aa & -578bb).
§§ 9 & 22 — DCP Regulatory Assessments
The bill requires the DCP commissioner to estimate and assess the
reasonable and necessary costs the department will incur each fiscal
year to regulate gaming authorized under the bill. She must do this at
the commencement of any fiscal year in which a game is conducted
and by September 30 of each fiscal year afterwards. She must consult
with the tribes for costs associated with online sports wagering or
online casino gaming and with OTB operators for costs associated with
operating retail sports wagering under agreements with CLC. The bill
requires that these estimated costs not exceed the estimate of
expenditure requirements that the commissioner must transmit as part
of biennial budget requests.
Each tribe and OTB operator that is assessed by the commissioner
must submit payment by the date she specifies, so long as it is at least
30 days after the assessment date. The bill requires the commissioner
to remit all funds received to the state treasurer, who in turn must
deposit them into a fund established by the bill (the “State Sports
Wagering and Online Gaming Regulatory Fund”). This fund must
contain any moneys required or permitted to be deposited in it and
must be held by the treasurer separate and apart from all other
moneys, funds, and accounts. Any balance remaining in the fund at
the end of any fiscal year must be carried forward for the next fiscal
year. The treasurer must expend money in the fund to pay the costs
incurred by DCP to regulate sports wagering and online casino
gaming.
The bill requires the comptroller to annually, by September 30,
calculate the actual reasonable and necessary costs incurred DCP to
regulate retail sports wagering, online sports wagering, or online
casino gaming during the prior fiscal year. The treasurer must set aside
amounts received in excess of those actual costs, which must be
considered a surplus. Under the bill, assessments for any fiscal year
must be reduced pro rata by any surplus amount or increased pro rata
by any deficit amount from the prior fiscal year’s amount. 2021SB-00570-R000396-BA.DOCX
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If a tribe or OTB operator is aggrieved by an assessment, it may
request a hearing before the DCP commissioner within 30 days of the
assessment. The commissioner must hold a hearing, in accordance
with the Uniform Administrative Procedure Act, within 30 days after
receiving the request.
Relatedly, by law, OPM must annually assess CLC an amount that
is enough to compensate DCP for its reasonable and necessary costs
for regulating specific CLC activities (CGS § 12-806b). The bill adds to
those activities the operation of the lottery, keno, retail sports
wagering, and online sports wagering.
§ 10 — Tribe Minimum Contributions
Under the state’s existing MOUs with the tribes, they must pay the
state a minimum contribution each fiscal year to maintain their
exclusive rights to operate video facsimile machines and other casino
games (see BACKGROUND). The bill requires that online sports
wagering and online casino gaming revenue payments from
operations outside of Indian lands during the first five years of
operation be counted toward the minimum contribution.
§§ 31 & 32 — Credit Cards
The bill specifically allows the use of credit cards for online casino
gaming, online sports wagering, and retailer sports wagering
conducted outside of Indian lands and for online lottery. It does this by
exempting participation in those games from the laws voiding and
recovering certain wagering contracts.
§§ 33-35 — Gambling Ban Exemptions
The bill exempts from the state’s illegal gambling law online casino
gaming, online sports wagering, and retail sports wagering conducted
on or outside Indian lands along with the devices or equipment used
to participate in those, if done or used in accordance with the bill’s
requirements. Relatedly, the bill also provides that the criminal laws
on illegal gambling do not apply to advertising, operating, or
participating in online casino gaming, online sports wagering, and
retail sports wagering that is conducted outside of Indian lands. 2021SB-00570-R000396-BA.DOCX
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A violation of the gambling laws is a class B misdemeanor,
punishable by up to six months imprisonment, a fine of up to $1,000,
or both (CGS § 53-278b). Additionally, anyone who, among other
things, knowingly owns, possesses, or rents a gambling device is guilty
of a class A misdemeanor, punishable by up to one -year
imprisonment, a fine of up to $2,000, or both (CGS § 53-278c).
OTHER PROVISIONS AFF ECTING CLC AND DCP
§ 23 — DCP Oversight of CLC
The bill extends DCP’s authority to regulate CLC’s activities to
online and retail sports wagering. Additionally, CLC must, before
implementing a procedure designed to assure the integrity of online or
retail sports wagering, obtain the DCP commissioner’s written
approval, as is the case under existing law for state lottery-related
procedures. By law, a “procedure” is generally a statement by a quasi-
public agency of general applicability, without regard to its
designation, that implements, interprets, or prescribes law or policy, or
describes the organization or procedure of the agency (CGS § 1-120).
§ 24 — Freedom of Information Act (FOIA) and CLC
Under the bill, the name and any personally identifying information
of a person who participates or participated in CLC’s voluntary self-
exclusion process created under the bill are not public records and are
exempted from disclosure under FOIA, with one exception. The CLC
president may disclose the name and any participation records of a
person who claims a winning lottery ticket from using the online
lottery established under the bill.
By law, FOIA applies to CLC. This means, among other things, that
most of CLC’s records are considered public and subject to disclosure,
with limited exceptions (e.g., unclaimed lottery ticket serial numbers).
§§ 25 & 29 — Prohibitions on Gaming by DCP and CLC Personnel
The bill extends a prohibition on CLC directors, officers, and
employees directly or indirectly participating in, or sharing in the
winnings from, existing CLC games to the ones authorized under the
bill. 2021SB-00570-R000396-BA.DOCX
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Additionally, as is currently the case for making wagers on other
forms of gambling (e.g., state lottery and OTB), the bill prohibits the
DCP commissioner and unit heads from placing a sports wager or
participating in online casino gaming. By law, a “unit head” is any
managerial employee with direct oversight of a legalized gambling
activity. Under existing law, the commissioner may adopt regulations
prohibiting DCP employees from engaging, directly or indirectly, in
any legalized gambling activity in which employees are involved
because of their employment.
OTHER PROVISIONS
§§ 36 & 37 — Casino Alcohol Sales
The bill prohibits casino permittees from selling alcoholic liquor on
Christmas unless food is also available at the same time. It also allows
them to sell alcohol until 4:00 a.m. during weekdays and weekends,
instead of 1:00 a.m. and 2:00 a.m. respectively under current law, if
they are selling to a customer who is staying on casino property.
Additionally, the bill requires casino permittees to maintain a
written alcohol service policy that provides for the safe sale and
dispensing of alcohol under its permit. Under the bill, each casino
permittee must review its policy at least once each year.
§ 38 — Tribal Lands Payment In Lieu of Taxes (PILOT)
The bill increases the statutory PILOT reimbursement rate, from
45% to 100%, of the property taxes that would have been paid for (1)
Mashantucket Pequot reservation land designated within the 1983
settlement boundary and taken into trust by the federal government
before June 8, 1999, and (2) Mohegan reservation land taken into trust
by the federal government. By law, the assessed value must be of the
land only and exclude any structures, buildings, or other
improvements on the land.
BACKGROUND
Tribal-State Procedures and Compact
Under IGRA, the Mashantucket Pequot and Mohegan tribes
currently operate the Foxwoods and Mohegan Sun casinos, 2021SB-00570-R000396-BA.DOCX
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respectively, on their reservations. Gambling at the Foxwoods Casino
is conducted under federal procedures, which are a legal substitute for
an IGRA-negotiated gaming compact. Gambling at the Mohegan Sun
Casino is conducted under a legally negotiated IGRA tribal-state
compact. Both the compact and procedures are like federal regulations.
As such, they supersede state law.
Video Facsimiles
Under both the procedures and compact, “video facsimile” is any
mechanical, electrical, or other device, contrivance, or machine, which,
upon insertion of a coin, currency, token or similar object therein, or
upon payment of any consideration whatsoever, is available to play or
operate. The play or operation is a facsimile of a game of chance, which
may deliver or entitle the person playing or operating the machine to
receive cash or tokens to be exchanged for cash or to receive any
merchandise or thing of value, whether the payoff is made
automatically from the machine or in any other manner whatsoever. A
common example of a video facsimile is a slot machine.
Moratorium on Video Facsimiles
The Mashantucket Pequot procedures and the Mohegan compact
authorize the tribes to operate video facsimile machines only pursuant
to (1) an agreement between the tribe and state (e.g., MOU); (2) a court
order; or (3) a change in state law that allows the operation of video
facsimile machines by any person, organization, or entity. Currently,
both tribes can operate video facsimile machines because of the MOU
each has with the state.
Tribal-State MOUs
The Mashantucket Pequot and Mohegan tribes have separate ,
binding MOUs with the state that give them the exclusive right to
operate video facsimile machines and other casino games in exchange
for a monthly contribution of, generally, 25% of their gross video
facsimile machine revenue to the state. Under the terms of the current
MOUs, if the state enacts a law to permit any other person to operate
video facsimile machines or other casino games, the tribes would no
longer need to pay the state any of their video facsimile revenue. 2021SB-00570-R000396-BA.DOCX
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Tribal-State MOUs Minimum Contribution
Under both existing MOUs, the minimum contribution each tribe
must contribute each fiscal year is the lesser of (1) 30% of gross
operating revenues from video facsimiles during the fiscal year or (2)
the greater of 25% of gross operating revenues from video facsimiles
during the fiscal year or $80 million.
Related Bills
sHB 6451, reported favorably by the Public Safety and Security
Committee, contains many of the same provisions in this bill in
establishing or modifying 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, like this bill, also 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.
sHB 6512, reported favorably by the Public Safety and Security
Committee, regulates sports wagering contingent upon it becoming
legal in the state. The bill includes provisions that restrict who is
permitted to wager on sports and place a number of requirements on
sports wagering operators.
COMMITTEE ACTION
Public Safety and Security Committee
Joint Favorable Substitute
Yea 18 Nay 6 (03/24/2021)