SB 971 — AN ACT REVISING VARIOUS GAMING STATUTES.

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971 submission of a third-party local and national criminal background check that includes a multistate and multijurisdictional criminal record locator or other similar commercial nation-wide database with validation, and other such background screening as the commissioner may require.

The initial application fee shall be waived for a live sSB971game /employee Filewho No.holds an active occupational employee license issued by the department, and a licensed live game employee shall not be required to obtain an occupational employee license.

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378 game employee who holds an active occupational employee license issued by the department, and a licensed live game employee shall not be required to obtain an occupational employee license.

(d)Thedepartment shalltransfer any licensing feecollectedfeecollectedpursuant pursuant to subsection (c) of this section for a live game employee of the holder ofamasterwageringlicenseundersection12-852ofthegeneralstatutes, as amended by this act, or of an online gaming operator or an online gaming service provider that is affiliated with such a holder of a master wagering license, to the State Sports Wagering and Online Gaming Regulatory Fund established under section 12-869 of the general statutes, as amended by this act.

(c)Public (1)Act ANo. master wagering license issued pursuant to subsection (a) of this section shall expire (A) upon the expiration of any new compact or amendment, or renewal thereof, entered into pursuant to section 12-851, (B) if the tribe holding such license operates E-bingo machines at a casino on the tribe's reservation in this state at any time during the ten- year initial term of any amendment or new compact, as described in subdivision (3) of subsection (a) of section 12-851, or (C) if the holder of such master wagering license ceases to be a tribe, or an instrumentality of or an affiliate wholly-owned by a tribe.

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971 (c) (1) A master wagering license issued pursuant to subsection (a) of this section shall expire (A) upon the expiration of any new compact or amendment, or renewal thereof, entered into pursuant to section 12-851, (B) if the tribe holding such license operates E-bingo machines at a casino on the tribe's reservation in this state at any time during the ten- year initial term of any amendment or new compact, as described in subdivision (3) of subsection (a) of section 12-851, or (C) if the holder of such master wagering license ceases to be a tribe, or an instrumentality of or an affiliate wholly-owned by a tribe.

sSB971Sec. / File No.

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378 Sec.

(A) Submit to a fingerprint-based state and national criminal history records check conducted in accordance with section 29- 17a, which may include a financial history check if requested by the commissioner, to determine thecharacter andfitnessoftheapplicant for thelicense, (B)provide(B)provideinformationrelatedtoother informationrelatedtoother businessaffiliations, and (C) provide or allow the department to obtain such other information as the department determines is consistent with the requirements of this section in order to determine the fitness of the applicant to hold a license.

(2) In place of the criminal history records check described in subparagraphPublic (A)Act ofNo. subdivision (1) of this subsection, the commissioner may accept from an applicant for an initial key employee license the submission of a third-party local and national criminal background check that includes a multistate and multijurisdictional criminal record locator or other similar commercial nation-wide database with validation, and other such background screening as the commissioner may require.

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971 subparagraph (A) of subdivision (1) of this subsection, the commissioner may accept from an applicant for an initial key employee license the submission of a third-party local and national criminal background check that includes a multistate and multijurisdictional criminal record locator or other similar commercial nation-wide database with validation, and other such background screening as the commissioner may require.

The holder of a key employee license shall not be required to obtain a live game employee or occupational sSB971employee /license. File No.

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378 employee license.

Any individual who is a key employee, a live game employee or an occupational employee of a master wagering licensee described in section 12-852, as amended by this act, or of an online gaming operator or online gaming service provider that is an Indian tribe or an instrumentality of or affiliate wholly-owned by an Indian tribe shall not be permitted to raise sovereign immunity as a defense to any action to enforce applicable provisions of sections 12-850 to 12-871, inclusive, as amended by this act, or, as applicable, sections 12-578f, 12-586f, 12-586g, 12-806c, 52-553, 52-554, 53-278a or 53-278g and regulations adopted under said sections against such individual in his or her capacity as a key,Public liveAct gameNo. or occupational employee to the extent that such action may be brought against a key, live game or occupational employee under any provision of the general statutes or the regulations of Connecticut state agencies.

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971 key, live game or occupational employee to the extent that such action may be brought against a key, live game or occupational employee under any provision of the general statutes or the regulations of Connecticut state agencies.

(a) For sufficient cause found pursuant to subsection (b) of this section, the commissioner may suspend or revoke a license issued pursuant to section 12-852, as amended by this act, or 12-853 or sections 12-855 to 12-859, inclusive, as amended by this act, or section 2 of this act, issue fines of not more than twenty-five thousand dollars per violation, accept an offer in compromise or refuse to grant or renew a license issued pursuant to section 12-852, as amended by this act, or 12- 853 or sections 12-855 to 12-859, inclusive, as amended by this act, or section 2 of this act, place the holder of a license issued pursuant to section 12-852, as amended by this act, or 12-853 or sections 12-855 to 12- 859, inclusive, as amended by this act, or section 2 of this act on probation, place conditions on such license or take other actions permitted by the general statutes or the regulations of Connecticut state agencies.

sSB971(b) /[Any Fileof No.the following may constitute sufficient] Sufficient cause for such action by the commissioner [, including, but] includes, but is not limited to:

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378 (b) [Any of the following may constitute sufficient] Sufficient cause for such action by the commissioner [, including, but] includes, but is not limited to:

(3) Discipline by, or a pending disciplinary action or an unresolved complaintPublic against,Act anNo. owner, key employee or applicant regarding any professional license or registration [of] issued by any federal, state or local government;

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971 complaint against, an owner, key employee or applicant regarding any professional license or registration [of] issued by any federal, state or local government;

sSB971[(11)] /(12) FileFailure No.to cooperate or give information to the department, local law enforcement authorities or any other enforcement agency upon any matter related to [the licensee's credential] a license or gaming [operations] operation;

378or 12[(12)] sSB971(13) FileFailure to comply with any provision of sections 12-850 to 12-871, inclusive, as amended by this act, corresponding regulations or any other provision of the general statutes that has an impact on the Public Act No.

37823-54 [(11)]13 (12)of Failure17 toSubstitute cooperateSenate orBill giveNo. information to the department, local law enforcement authorities or any other enforcement agency upon any matter related to [the licensee's credential] a license or gaming [operations] operation;

or971 [(12)] (13) Failure to comply with any provision of sections 12-850 to 12-871, inclusive, as amended by this act, corresponding regulations or any other provision of the general statutes that has an impact on the integrity of gaming in this state, including, but not limited to, failure of an online gaming operator who contracts with the Connecticut Lottery Corporation to abide by the conditions for operation set forth in subparagraph(B),(C)or(E)ofsubdivision(2)ofsubsection(a)ofsection 12-853.

(e) The voluntary surrender or failure to renew a license or registration shall not prevent the commissioner from suspending or revoking such license or registration or imposing other penalties sSB971permitted /by Filethis No.section.

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378 permitted by this section.

(a)Public (1)Act AtNo. the commencement of operating online sports wagering or online casino gaming pursuant to section12-852,asamendedby thisact, inany fiscalyear, andonor before September thirtiethineachfiscalyear thereafter that such wagering and gaming is conducted, the commissioner shall estimate and assess, after consultation with each holder of a master wagering license under section 12-852, as amended by this act, the reasonable and necessary costs that will be incurred by the department to regulate the operation of such wagering or gaming under sections 12-852, as amended by this act, and 12-855 to 12-865, inclusive, and section 2 of this act by each such licensee, (A) in the next fiscal year;

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971 (a) (1) At the commencement of operating online sports wagering or online casino gaming pursuant to section12-852,asamendedby thisact, inany fiscalyear, andonor before September thirtiethineachfiscalyear thereafter that such wagering and gaming is conducted, the commissioner shall estimate and assess, after consultation with each holder of a master wagering license under section 12-852, as amended by this act, the reasonable and necessary costs that will be incurred by the department to regulate the operation of such wagering or gaming under sections 12-852, as amended by this act, and 12-855 to 12-865, inclusive, and section 2 of this act by each such licensee, (A) in the next fiscal year;

(b) Each holder of a master wagering license under section 12-852, as amended by this act, shall pay to the commissioner the amount assessed sSB971to /such Filelicensee pursuant to subsection (a) of this section not later than thedate specified by the commissioner for payment,providedsuch date Public Act No.

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378971 to such licensee pursuant to subsection (a) of this section not later than thedate specified by the commissioner for payment,providedsuch date is not less than thirty days from the date of such assessment and no payment shall be due prior to the commencement of wagering and gaming operationsby suchlicensee.

(e) If the holder of a master wagering license under section 12-852, as amendedbythisact,isaggrievedbyanassessmentundertheprovisions ofPublic thisAct section, the licensee may request a hearing before the sSB971 / File No.

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378971 of this section, the licensee may request a hearing before the commissioner not later than thirty days after such assessment.

During such tenure, they shall have all the powers conferred on state [policemen] police officers while investigating or making arrests for any offense arising from the operation of any off- track betting system, retailsportswagering,asdefinedin section12-850,section 12-850, as amended by this act, or the conduct of any lottery game.

ThisApproved actJune shall26, take2023 effectPublic asAct followsNo. and shall amend the following sections:

Section23-54 117 fromof passage17 12-850 Sec.

2 from passage New section Sec.

3 from passage 12-852(c) Sec.

4 from passage 12-859(c) and (d) Sec.

5 from passage 12-860 Sec.

6 from passage 12-862 Sec.

7 from passage 12-869 Sec.

8 from passage 29-18c PS Joint Favorable Subst.

sSB971 / File No.

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378 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Consumer Protection, Dept.;

Various - See Below See Below Emergency Services and Public Potential Protection, Dept.

Revenue Gain Note:

Various=Various Municipal Impact:

None Explanation The bill makes various revisions to the gaming statutes resulting in the potential revenue gains described below.

Sections 2 and 4 require applicants for live game employee and key employee licenses to submit to a fingerprint-based state background check or a background check conducted by an approved third-party, resulting in a potential revenue gain to the state.

The Department of Emergency Services and Public Protection (DESPP) conducts state background checks for a $75 fee per person.

DESPP may conduct fingerprinting for a $15feeper person,paidtotheApplicant Fingerprint Card Submission Account.

1 Section 2 also creates a live game employee license resulting in a potential revenue gain to the State Sports Wagering and Online Gaming RegulatoryFundtotheextenttheselicensesareappliedfor.

Alivegame employee license has an initial application fee of $200, a renewal fee of 1Funds in the non-lapsing Applicant Fingerprint Card Submission Account are used for IT support and maintenance for the fingerprinting systems.

sSB971 / File No.

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378 $100, and expires biennially.

The bill also makes various minor technical and conforming changes to the gaming statutes resulting in no fiscal impact to the state.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of license applications and renewals and the number of background checks conducted.

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378 OLR Bill Analysis sSB 971 AN ACT REVISING VARIOUS GAMING STATUTES.

SUMMARY PA 21-23 established new frameworks for legalizing and regulating, among other things, in-person and online sports wagering and online casino gaming.

It also assigned several regulatory responsibilities to the Department of Consumer Protection (DCP), including establishing and maintaining multiple new gaming licenses and investigating and enforcing the act’s provisions.

This bill creates a new license class (“live game employee”) under which certain people associated with live online casino gaming must be licensed.

It also makes several changes for “key employees,” including specifying that the term, for licensure purposes, includes certain chief information and data security officers and waives other licensing requirements that may apply to their positions.

Additionally, the bill expands what is a “sporting event” for sports wagering purposes so that it includes any sporting or athletic event where two or more people participate, individually or on a team, and may be eligible to receive more compensation than the actual expenses for their participation (rather than, as under current law, requiring that the participants actually receive more compensation than their expenses) (§ 1).

The bill also expands the jurisdiction of certain DCP investigators appointed by the Department of Emergency Services and Public Protection commissioner to act as special police officers.

It specifically allows them to investigate and make arrests for any offense arising from operating “retail sports wagering” (i.e., in-person sports wagering done sSB971 / File No.

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378 in connection with the Connecticut Lottery Corporation (CLC)), which is in addition to their authority under current law over the off-track betting system and lottery games (§ 8).

Lastly, the bill makes conforming and technical changes.

EFFECTIVE DATE:

Upon passage §§ 1-3 — LIVE GAME EMPLOYEES Definitions (§ 1) Under the bill, a “live game employee” is first an employee of a(n) (1) master wagering licensee, (2) licensed online gaming operator, or (3) online gaming service provider that is operating live online casino gaming (see BACKGROUND).

They must also be (1) responsible for, in a live online casino authorized under state law, (a) handling consumables or (b) presenting live online casino gaming;

or (2) a direct manager of those responsible employees.

“Consumables” are nondurable items, including dice, playing cards, and roulette balls used in live online casino gaming.

“Handling consumables” is physical contact with, or supervisory oversight over the acceptance, inventory, storage, or destruction of, consumables, as well as being responsible for card inspection, counting, and shuffling.

Licensure (§§ 2 & 3) Before starting their employment, the bill requires live game employees, other than key employee license holders, to get a live game employee license if they will be directly or substantially involved in operating live online casino gaming in a way that impacts its integrity.

The bill allows the DCP commissioner to determine the application process and forms for the live game employee license.

However, under the bill, the license application form must require an applicant to do the following:

1.

submit to a (a) fingerprint-based state and national criminal history records check done by the State Police under state law, sSB971 / File No.

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378 which may include a financial history check if requested by the DCP commissioner, to determine the applicant’s character and fitness for the license or (b) DCP-acceptable third-party local and national criminal background check and other background screening the DCP commissioner may require;

2.

give information about the applicant’s other business affiliations;

and 3.

give, or allow DCP to get, any other information the department determines is consistent with the bill’s other requirements for determining the applicant’s fitness to hold the license.

Under the bill, a third-party local and national criminal background check must include a multistate and multijurisdictional criminal record locator or other similar commercial nationwide database with validation.

This check must also be done by a third-party consumer reporting agency or background screening company that complies with the federal Fair Credit Reporting Act and is accredited by the Professional Background Screening Association.

The bill requires live game employee licenses to be renewed every two years.

It sets the initial license application fee at $200 and the renewal fee at $100.

However, the initial fee must be waived for live game employees who hold active DCP-issued occupational employee licenses (see BACKGROUND).

The bill makes licensees responsible for paying any fees incurred for the criminal background check associated with their license renewals.

The bill prohibits DCP from requiring that licensed live game employees get occupational employee licenses.

It also requires the department to transfer the licensing fees for live game employees of the Mashantucket Pequot and Mohegan tribes, and of the tribes’ affiliated online gaming operators and online gaming service providers, to the State Sports Wagering and Online Gaming Regulatory Fund.

Upon the expiration of a tribe’s master wagering license, existing law sSB971 / File No.

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378 requires that all other licenses associated with it expire without the need for any further action by DCP.

This includes licenses for an online gaming operator, online service provider, or sports wagering retailer and all corresponding key and occupational employee licenses.

The bill adds licenses for live game employees to this list.

§§ 1 & 4 — KEY EMPLOYEES Definition (§ 1) By law, a “key employee” is generally someone with a specified position (e.g., president, chief officer, financial manager, or compliance manager) or an equivalent title with specified responsibilities who is associated with a master wagering licensee or a licensed online gaming service provider, online gaming operator, or sports wagering retailer.

The bill additionally includes someone with the following position or an equivalent title:

(1) chief information officer, who is the person generally responsible for establishing policies or procedures on, or making management decisions related to, information systems;

and (2) chief data security officer, who is the person generally responsible for establishing policies or procedures on, or making management decisions related to, technical systems.

Current law further provides three other types of people that are included as “key employees.” The bill eliminates two of these types:

individuals who exercise (1) control over technical systems and (2) enough control in, or over, a licensee as to require licensure in the DCP commissioner’s judgment.

The bill instead includes, as a “key employee,” an individual who is responsible for establishing the policies or procedures on, or making management decisions related to, wagering structures or outcomes for a licensee.

Licensure (§ 4) As part of a key employee license application, the bill requires, rather than authorizes, the DCP commissioner to require applicants to:

1.

submit to a state and national criminal history records check donethroughtheStatePolice understatelaw,whichmayinclude sSB971 / File No.

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378 a financial history check if requested by the DCP commissioner, to determine the applicant’s character and fitness for the license;

2.

give information related to other business affiliations;

and 3.

give,orallowDCPtoget,otherinformationinordertodetermine the applicant’s fitness to hold the license.

It also specifies that the records check through the State Police must be fingerprint-based.

Though, by law, the DCP commissioner may accept certain third-party local and national criminal background checks instead.

Under existing law, the initial application fee for a key employee license is waived for any key employee who holds an active occupational employee license issued by DCP.

The bill extends this waiver to key employees who hold an active live game employee license.

The bill also prohibits DCP from requiring that licensed key employees get a live game employee or occupational employee license.

§§ 5-7 — CONFORMING AND MINOR CHANGES AFFECTING LIVE GAME AND KEY EMPLOYEES The bill makes conforming changes to the gaming laws that apply to the Mashantucket Pequot and Mohegan tribes and their affiliates and employees by:

1.

extending to their live game employees the existing law barring certain key and occupational employees from raising the defense of sovereign immunity for actions brought against them in their employee capacities (§ 5);

2.

including the cost of regulating their live game employees in the calculationfor DCP’s annualregulatory assessmentsonthetribes (§ 7);

and 3.

allowing the tribes to reduce their DCP regulatory assessments sSB971 / File No.

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378 by the amounts paid for their live game employee fees, just as current law allows for their other licensing fees paid (§ 7).

The bill also extends to live game employee licenses existing law that authorizes the DCP commissioner to issue suspensions and fines and impose other penalties when there is sufficient cause found.

By law, sufficient cause includes, among other things, failure to properly license occupational employees.

The bill adds failure to properly license key employees and live game employees as a type of sufficient cause (§ 6).

Additionally, the bill extends to live game employee licensees existing law’s notice and hearing procedures when the DCP commissioner refuses to issue or renew a license.

It also applies to live game employee licensees a prohibition on anyone whose license has been revoked from applying for another license issued under the act for at least one year after the date of the revocation (§ 6).

BACKGROUND Additional Definitions By law and under the bill, a “master wagering licensee” is generally the Mashantucket Pequot or Mohegan tribes or the CLC.

An “online gaming operator” is a person or business entity that operates an electronic wagering platform and contracts directly with a master wagering licensee to provide (1) one or more Internet games or (2) retail sports wagering.

An “online gaming service provider” is a person or business entity, other than an online gaming operator, that provides goods or services to, or otherwise transacts business related to, Internet games or retail sports wagering with a master wagering licensee or a licensed online gaming operator, online gaming service provider, or sports wagering retailer.

“Online casino gaming” means the following games conducted over the Internet:

(1) slots, blackjack, craps, roulette, baccarat, poker and video poker, bingo, live dealer, other peer-to-peer games, and any sSB971 / File No.

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378 variations of these games and (2) any games authorized by DCP.

An “occupational employee” is an employee of a master wagering licensee or a licensed online gaming service provider, online gaming operator, or sports wagering retailer.

A “sports wagering retailer” is a person or business entity that contracts with CLC to facilitate retail sports wagering operated by CLC throughanelectronicwagering platformatupto15facilitiesinthestate.

Related Bill sSB 992, § 4, favorably reported by the Public Safety and Security Committee, explicitly requires key and occupational employees employedbyCLCtoannuallyrenewtheiremployeelicenses,asexisting law requires, but waives their annual license renewal fees.

COMMITTEE ACTION Public Safety and Security Committee Joint Favorable Substitute Yea 24 Nay 1 (03/16/2023) sSB971 / File No.

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