Senate President Martin Looney AGO 2016-3 No. 2016-03
Connecticut Attorney General Opinions Office of the Attorney General State of Connecticut April 18, 2016 Senate President Martin Looney LOB Room 3300 Hartford, CT 06106 Senate Majority Leader Bob Duff LOB Room 3300 Hartford, CL 06106 Dear Senators Looney and Duff: You have asked for a formal opinion about the impact legislation authorizing daily fantasy sports contests may have on the State's current revenue-sharing arrangements with the Mashantucket Pequot Lribal Nation ("MPLN") and the Mohegan Tribe of Indians of Connecticut (the "Mohegan Tribe," together with MPTN, the "Tribes"). For the reasons that follow, I conclude that although there is a high degree of uncertainty, there is a substantial risk that the passage of such legislation could jeopardize the State's revenue-sharing arrangements with the Tribes. On April 7, 2016, the Committee on Finance, Revenue and Bonding (the "Finance Committee") favorably reported out of committee a substitute for House Bill 5046,
An Act Concerning Revenue Items to Implement the Governor's Budget. Although the official substitute language for HB 5046 has not yet been released by the Legislative Commissioners' Office, the Offices of Legislative Research and Fiscal Analysis have provided Finance Committee members with a memorandum summarizing the proposal. According to that memorandum, the substitute for HB 5046 would require the Department of Consumer Protection to adopt and enforce regulations intended to protect daily fantasy sports contest players from unfair or deceptive acts or practices. The proposal would require daily fantasy contest operators to pay initial and renewal registration fees and would impose an 8.75% surcharge on the total entry fees charged by operators, net of cash payouts. Lastly, and most importantly for present purposes, HB 5046 would specifically exempt daily fantasy sports contests from the state's criminal gambling laws. The memorandum summarizing HB 5046 does not define daily fantasy sports. A separate proposal, however, Senate Bill 192,
An Act Concerning Daily Fantasy Sports, defines a "daily fantasy sports contest" as "a contest in which the offer or award of a prize is connected to the statistical performance or finishing position of one or more individual competitors in an underlying amateur or professional sports competition, but does not include the offer or award of a prize to a winner of or competitor in the underlying competition itself."
[1] SB 192 further requires the Commissioner of Consumer Protection to adopt regulations governing daily fantasy sports contests, including "a provision that daily fantasy sports contests are not contests of chance." SB 192 defines a "contest of chance" as "a contest in which the outcome of such contest depends in a material degree upon an element of chance." We presume, for purposes of this opinion, that HB 5046 will include a definition of "daily fantasy sports contests" that is substantially similar to the definition set forth in SB 192. Proposed bills in other states use a similar definition. Any legislation authorizing daily fantasy sports contests must be viewed against the backdrop of the existing agreements between the State and the Tribes. In 1991, under the provisions of the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701
et seq., the Secretary of the Interior approved the Final Mashantucket Pequot Gaming Procedures ("Mashantucket Procedures"), governing the operation of casino gaming on the Mashantucket reservation.
[2] In 1994, the State and the Mohegan Tribe entered into a Gaming Compact ("Mohegan Compact", together with the Mashantucket Procedures, the "Compacts"), similarly governing the operation of casino gaming on the Mohegan reservation. Both the Mashantucket Procedures and the Mohegan Compact contain provisions imposing a moratorium on video facsimile games absent certain conditions. Specifically, § 15(a) of the Mashantucket Procedures provides:
Notwithstanding the provisions of section 3(a)(ix), the Tribe shall have no
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