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Fantasy sports industry says bill will put games on hold

May 24, 2021 GMT

Thousands of Connecticut residents who play fantasy sports for money using online companies could be sidelined for the upcoming NFL season if legislation moving through the state General Assembly becomes law, the industry is warning.

The Fantasy Sports & Gaming Association also contends the wide-ranging gambling bill, approved in Connecticut’s House of Representatives last week and currently awaiting action in the Senate as early as Tuesday, would limit the number of operators when there are actually dozens of games and contests offered by different companies.

“I think there was probably a mindset that this industry is just FanDuel and DraftKings. It’s so much bigger than that,” said Peter Schoenke, owner of RotoWire.com and a board member of the association, which is calling on lawmakers to make changes to the bill.

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He said the industry was “blindsided” by the legislation because it was not consulted. As currently written, Schoenke said the bill will not allow any fantasy sports companies to continue operating in Connecticut after July 1 and until the state sets up a licensing system and these firms are ultimately approved for a license.

“They really kind of made a mistake that’s going to really hurt fantasy sports players in the state of Connecticut who are going to be unable, in the short term and likely this football season, to be able to play any fantasy sports. And longer term, (they’re) only going to be able to play a few of the contests that our industry offers,” he said.

Paul Mounds, Lamont’s chief of staff who led the negotiations on the gambling bill said the administration spoke with DraftKings during the talks and he contends the legislation will ensure that fantasy sports can be legally played in the state.

“We look forward to having continuous conversations with entities in the daily fantasy space as Connecticut looks to solidify and finalize the legalization of daily fantasy sports in the state of Connecticut,” he said.

Fantasy sports companies have been operating in Connecticut for years. They’ve argued that it’s a game of skill and not gambling, so therefore it’s not an illegal activity.

Legislation was passed in 2017, however, specifically legalizing fantasy sports contests and requiring the contest operators to provide consumer protections to players, register with the state and pay taxes and registration fees. However, those requirements hinged on a sports betting and gambling agreement between the state and the two federally recognized tribes, who have exclusive rights under a compact with the state to casino game and video facsimile games in Connecticut. That deal, which required the compact to be amended, wasn’t reached until this year. In the meantime, the companies have continued to operate in the state.

Schoenke predicted it could take six months to two years for companies to get licensed, based on what he’s seen in other states. He said 25 states with laws concerning fantasy sports allowed the companies already operating to continue through the licensing application process so fans would not disrupted.

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“They didn’t take all the companies down and then have them restart again,” he said.

The industry estimates there are roughly 600,000 people in the state who play fantasy sports contests, which typically involve players building teams of professional athletes and earning points based on how those athletes perform in real-life games. The vast majority of fantasy sports players, however, don’t play with a company and pay entry fees.

Connecticut Department of Consumer Protection Commissioner Michelle H. Seagull said the agency is “actively working on regulations” simultaneously for fantasy sports, sports betting and internet lottery, based on the proposed legislation. The bill does not set a deadline for when the regulations need to be completed.

Last week, the state House of Representatives voted 122-to-21 in favor of a long-awaited gambling agreement that the Democratic governor his administration reached in March with the state’s two federally recognized Native American tribes. It creates a new framework for legalizing and regulating in-person and online sports wagering, online casino gambling, in-person and online keno, online lottery draw games and fantasy sports.

Ultimately the 10-year deal, which essentially authorizes the Mashantucket Pequot and Mohegan Tribes and the Connecticut Lottery Corporation to operate these games, will need approval by the U.S. Department of Interior.

The bill allows the tribes to conduct fantasy contests at their casinos on reservation land, Mohegan Sun and Foxwoods Resort Casino, and outside the reservations, online. In return, the state will receive a share of those revenues.

FanDuel and DraftKings, which also offer sports betting where it’s legal, have already paired up with one of the two Connecticut casinos. DraftKings is the official daily fantasy sports partner for Foxwoods while FanDuel has an agreement with Mohegan Sun.