After months of struggling under the weight of competing interests, Connecticut's Governor recently signed into law a State budget that includes provisions for the legalization and regulation of daily fantasy sports. Those in the industry should view this development as a welcome surprise, as it had long been anticipated that the prolonged budget squabbles spelled certain doom for the prospects of fantasy sports regulation in the State.
What are the key components of the proposed Connecticut fantasy sports regulations?
The Connecticut budget instructs the Commissioner of Consumer Protection to adopt regulations to govern fantasy sports operators and their respective games by no later than July 1, 2018. Regulations will include, at a minimum:
- Age restrictions prohibiting anyone younger than 18 years of age from participating in fantasy sports contests;
- Truthful advertising requirements;
- Procedures to ensure the integrity of contests;
- Initial operator registration fees of $15,000; and
- Annual registration renewal fees of $15,000 or 10% of gross receipts, whichever is less.
Importantly, Connecticut's prospects for implementing daily fantasy sports contest regulations depend entirely on the ability of the Governor to renegotiate agreements with Indian tribes that now operate casinos within the State. Because these agreements provide the respective Tribes with a measure of exclusivity to provide regulated gaming activity in the State, the budget measure mandates that the prospective fantasy sports regulations may only be implemented contingent upon the Tribes' consent to amend their respective agreements with the State.
The Ongoing Need for Fantasy Sports Lawyers
The continued growth and evolution of the laws and regulations governing fantasy sports operators and the contests that they offer warrants the constant attention of industry operators. Between various legislative efforts across the country affecting the industry, conflicting opinions from attorneys general and court challenges to newly-enacted legislation, it is clear that the legal landscape of the fantasy sports space is far from settled. Given the regulatory environment, it is critical to engage a competent fantasy sports lawyer to become/remain compliant with applicable law when setting up and operating fantasy sports contests.
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