Bill That Allows Sports Betting In Connecticut But Hurts Fantasy Passes House

Posted on May 21, 2021

The bill that approves updated agreements with two tribal partners and authorizes Connecticut sports betting hit the fast track Thursday.

Connecticut’s House overwhelmingly approved HB 6451 122-21 just hours after it was hastily approved by a joint committee. That leaves approval for the Senate and Gov. Ned Lamont at the state level.

The amended compacts then head to the Department of Interior for federal approval as a final step.

The current timeline plans for CT sports betting to start around the beginning of the NFL season. Whether fantasy sports contests will be available by then is unclear.

CT sports betting should be ready by NFL season – but will fantasy?

The expanded gaming agreement between Lamont and the Mohegan and Mashantucket Pequot tribes might knock out fantasy sports in the state for an extended period.

The proposal requires all fantasy sports companies to be licensed through one of the three licensees under this bill. Until rules and regulations are decided and those companies get a license, though, they will not be able to operate. The language is equally confusing because there was already a law passed in 2017 allowing fantasy contests.

“[The bill] would knock out all the operators that are currently operating in the state and then they’d have to reapply,” said Peter Schoenke, current board member and former chairman of the Fantasy Sports & Gaming Association. “And the application process is kind of ambiguous so you might not be able to have fantasy sports in the state until later in the fall, after peak NFL season, or even well into 2022.

“The second problem is there might be as few as three or four licensees in the state for fantasy sports. And obviously, that just doesn’t really work. There’s a lot more companies than that.”

This is the second time a bill attacking fantasy sports is under consideration. Earlier this week, Florida’s legislature killed a bill that would have kicked daily fantasy sports operators out of Florida until they could be licensed.

Not just DFS

The bill would impact more than just the big DFS operators like DraftKings and FanDuel, Schoenke noted. There are “tons of small companies” that have season-long contests that would be shut out as well, he said.

Those companies have much smaller revenue streams than the big DFS operators. As such, they might not be able to afford to bid for one of those few licenses, Schoenke added.

The FSGA and others took to Twitter to spread the word. That included Matthew Berry, senior fantasy football analyst for ESPN. Berry tweeted it would be difficult for him and his ESPN colleagues based in Connecticut to do their jobs this season with the bill as it stands.

Schoenke hopes to see a similar response to Florida to get some changes.

“Obviously, we wish we had more time,” Schoenke said. “So hopefully the legislators will hear from their constituents and realize – because they probably don’t even realize what they’re doing to fantasy sports.”

Horn: Fantasy sports in ‘murky’ spot legally

Rep. Maria Horn, co-chair of the joint Public Safety and Security Committee, was asked about fantasy sports specifically while presenting the bill on the House floor. Horn noted she was glad to answer the question as she saw it was in the news.

Unfortauntely for fantasy operators, the answer was not what they wanted to hear.

Since the 2017 law depended on an amended compact, fantasy operators are in a “legal murky area, at best,” Horn said.

Updated timeline for final CT sports betting license

CT Lottery Chairman Rob Simmelkjaer gave some more details on the bid proposal deadline for the state’s third and final sports betting skin during a Sports Betting Development Committee meeting early Thursday morning.

Binding proposals are due 14 days after Lamont signs HB 6451 into law. The timeline previously called for submissions due May 27.

That will push back some of the near-term deadlines like announcing a winner, which was expected June 10.

The process was essentially narrowed down to four potential partners from 15 initial respondents, though anyone can submit a proposal.

The only sportsbook the Lottery is unlikely to partner with is DraftKings Sportsbook. The Mashantucket Pequot announced its agreement with DraftKings in December. The Mohegan Indians, partnered with Kambi, said they are still evaluating the market.

RFP Q&A gives some insight into proposals

Some of the 27 questions and answers between prospective bidders and the CT Lottery offer a peek behind the curtain of what sports betting in Connecticut might look like.

The Lottery confirmed its intention is to select one operator for both online and retail channels. One company showed concern over proposing plans for the 15 retail sportsbooks only to get just the retail channel and not have the mobile business to help make up those costs.

The Lottery is evaluating various locations for those 15 sportsbooks. Some of those locations “currently operate as OTB locations, and some with no gaming operations in place,” it said. Not all retail locations need to be ready on day one of legal CT sports betting, but it sounds like there is an expectation to at least have kiosks or tellers ready:

“CLC does not expect that all retail locations will be launched on Day 1, but should not be delayed by the inability to outfit them with the necessary equipment to begin selling sports betting. … Any phased rollout in a proposal should be clear to identify what is possible/available/recommended by Day 1, and when other locations are proposed to be brought live.”

There is no requirement for retail locations to accept deposits for online accounts but it would be allowed. Kiosks could also give bettors access to their online accounts.

Multiple revenue share questions

Whichever company asked question 25 likely didn’t leave the CT Lottery thrilled with their proposal.

The question asked for specific details on what is expected in an Excel sheet that goes along with the proposals. It mentions the company proposed a revenue share of 22.5% of gross revenue excluding bonusing.

Simmelkjaer did not give specifics about what the Lottery wanted but told LSR the Lottery wants to be “very competitive on the revenue share front.”

New Hampshire gets 51% of all mobile and 50% of retail NH sports betting revenue from DraftKings Sportsbook. NY sportsbooks will also share a minimum of 50%.

Another question asked if the minimum share of $5 million in year one and $10 million in years two through 10 could be raised or reduced. The Lottery said it does not expect to change those minimums.

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Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

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