Section 12-865-3 - General Requirements(a) Internet gaming shall only be engaged in by patrons who have established an internet gaming account. A gaming entity licensee may only allow an individual to establish one account on each electronic wagering platform operated by the licensee in accordance with Section 12-865-11(a) of the Regulations of Connecticut State Agencies.(b) Gaming entity licensees shall not include in any internet gaming app any software that: permits unauthorized data collection or file extraction; contains malware; or contains any other feature that compromises the integrity of the patron device or the data contained therein.(c) A gaming entity licensee shall have a compliance manager, licensed as a key employee, responsible for the operation and integrity of internet games and gaming and reviewing all reports of suspicious activity that impacts the integrity of internet games and gaming in Connecticut. In addition to notifying the department of the suspicious activity listed in subdivisions (1) to (7), inclusive, of this subsection, the licensee shall provide a detailed description of the incident and a resolution report within seven days of discovery of such incident. In the event that such issue cannot be resolved within seven days, the licensee shall provide the department with an interim resolution report, which shall be updated every seven days thereafter until the issue is fully resolved. In addition to any required reporting to law enforcement under other law or regulation, a gaming entity licensee shall immediately, but no later than twenty-four hours, notify the department in writing, upon detecting or becoming aware of any of the following: (1) Any person participating in internet gaming or retail sports wagering who is engaging in or attempting to engage in, or who is reasonably suspected of, cheating, theft, embezzlement, collusion, use of funds derived from illegal activity, money laundering, or any other illegal activities.(2) Any individual who is reasonably suspected of misrepresenting such individual's identity or using false identification to establish or attempt to establish an internet gaming account.(3) Suspected criminal activity related to any aspect of either internet gaming or retail sports wagering.(4) Any criminal or disciplinary proceedings commenced against the online gaming operator or sports wagering retailer in connection with its internet gaming or retail sports wagering operations.(5) Any suspicious wagering activity or patterns that indicate a concern regarding the integrity of an internet game or sports wagering.(6) Any other conduct that corrupts the outcome of an internet game or sports wagering.(7) Any wagers that violate any applicable state or federal law.(d) A gaming entity licensee shall comply with all federal requirements including, but not limited to, suspicious activity reporting and W2-G reporting.(e) A gaming entity licensee shall not knowingly allow a patron to place a wager as an agent or a proxy for another individual.(f) A gaming entity licensee shall not knowingly allow a prohibited patron to place a wager on an internet game or sporting event that the patron is prohibited from participating in or be paid winnings or prizes from such wager.(g) If an online gaming operator determines that an individual is prohibited from engaging in all or a specific type of gaming for reasons other than voluntary self-exclusion, the online gaming operator shall document the reason that the individual is prohibited, suspend the internet gaming account or place reasonable restrictions to prohibit the individual from gaming in specific types of gaming, and, if prohibited from all forms of gaming, prohibit the individual from creating a new internet gaming account with such online gaming operator until such time that the individual is no longer determined to be a prohibited patron.(h) Gaming entity licensees shall comply with the data privacy and cybersecurity provisions of section 12-865-32 and 12-865-33 of the Regulations of Connecticut State Agencies. Additionally, gaming entity licensees shall maintain cybersecurity insurance coverage, provide relevant employee training on data privacy and cybersecurity, and conduct information system audits no less than quarterly. Cybersecurity insurance coverage shall include coverage for data compromise response, identity recovery, computer attack, cyber extortion, and network security. (i) Master wagering licensees, online gaming operators and sports wagering retailers shall comply with all of the following tax withholding and reporting requirements: (1) Master wager licensees, online gaming operators or sports wagering retailers shall be responsible for all applicable federal and state withholding and reporting responsibilities arising under the provisions of the act pertaining to gaming. The department shall be held harmless by such master wagering licensees, online gaming operators, and sports wagering retailers from any federal or state tax penalties or interest that may arise as a result of such licensee's activities in performing these responsibilities.(2) The department shall have the right to inspect withholding and miscellaneous income records and related tax filings prepared by, or obtained by, the master wagering licensee, online gaming operator, or sports wagering retailer at all times.(3) The master wagering licensee, online gaming operator, or sports wagering retailer shall provide W2-G information to the department as requested and on an annual basis, by June 30th of each year, in a format acceptable to the department.(4) An online gaming operator or sports wagering retailer shall provide notice to a patron in the event that such patron's internet gaming account is subject to tax withholdings.(j) In the event of any changes to the contact information, management, or licensure status in another jurisdiction in the United States, a gaming entity licensee shall report any such changes to the department within ten days of such change and the department may require the licensee to file an amended application or provide additional documentation.(k) A license issued under 12-865-4 to 12-865-8, inclusive, of the Regulations of Connecticut State Agencies shall not be transferred or sold. Prior to any transfer, sale, or change in ownership of a gaming entity licensee, a new license shall be obtained by the licensee or new owner, as applicable, unless one of the following provisions is met: (1) The change in ownership is a sale of shares of a publicly listed or traded company to a shareholder that will own less than five percent of the gaming entity licensee after the transaction. No notice to the department is required based on this change of ownership.(2) The change in ownership is a sale of shares of a publicly listed or traded company to a financial institution or other investor, which in the sole judgment of the commissioner is determined to be a passive investor in the gaming entity licensee, and where the financial institution or other investor does not exercise any control of the gaming entity licensee. For the purpose of this subsection, "control" means the power to exercise authority over, or direct the management and policies of, a business entity. Written notice shall be provided to the department of the sale of five percent or more of the gaming entity licensee. The new owner shall provide the department with documentation sufficient to verify the terms of the sale and the role of the new owner so that the commissioner may make a determination under this provision.(3) There is a change of fifty percent or less in the ownership of a non-publicly listed or traded gaming entity licensee and such change in ownership does not result in a change in control of the gaming entity licensee. Written notice shall be provided to the department, describing the parties and transaction involved with such change in ownership.(4) The commissioner waives the requirement for a new application.(l) A gaming entity licensee shall inform the department in writing within five days of any change to the name of such licensee, including establishing a trade name.(m) In the event of any changes to the contact information or licensure status in another jurisdiction in the United States, an occupational licensee or key employee shall report any such change to the department within ten days of such change and the department may require the licensee to file an amended application or provide additional documentation.(n) The department shall maintain a list of technical standards on the department's website, which shall be reviewed by the department annually to ensure the technical standards preserve the integrity of gaming through sufficient system requirements and patron account management standards. The department may modify or update the technical standards based on the following reasons: in response to a legal interpretation; to include additional or amend existing technical standards that the commissioner deems necessary to preserve the integrity of gaming or protect consumers from financial harm; to adjust to changes in technology, relevant standards, or platform design; or for any other reason necessary to preserve that integrity of gaming under the act. The department shall post any updates to the technical standards on the department's website and such technical standard shall be effective thirty days after such posting unless such period is extended by the commissioner. The department shall provide written notice to all active online gaming operator licensees of any updates to the technical standards prior to implementation.(o) The department may waive any technical standard established pursuant to subsection (n) of this section of the Regulations of Connecticut State Agencies, upon written request by a licensee. Waiver shall only be granted if the department determines that the gaming entity licensee has established, through written certification to the department's satisfaction, that such gaming entity's systems or standards: (1) Meet the policy goals of the technical standard that is being waived; or(2) Are equivalent to or exceed the NIST standards required in sections 12-865-11, 12-865-13, 12-865-20 and 12-865-33 of the Regulations of Connecticut State Agencies.(p) The department may rescind a waiver granted under subsection (o) of this section at any time if the department has reason to believe that the licensee no longer meets the policy goals of the waived technical standard.(q) A gaming entity licensee shall suspend a patron's internet gaming account and disable account access if the licensee discovers (1) that the patron is using proxy servers, virtual private networks, spoofing, or other means designed to disguise identity or physical location, (2) that the location information indicates a likelihood of unauthorized or improper access, or (3) any other violation of the act or sections 12-865-1 to 12-865-34, inclusive, of the Regulations of Connecticut State Agencies that threatens the integrity of gaming.(r) Gaming entity license applicants shall notify the department at the time of application of the identity of each key employee. Gaming entity licensees shall notify the department of any change to or addition of key employees within one week, unless a shorter period is prescribed by law.(s) A gaming entity licensee shall notify the department within one business day that an employee holding a key employee license or an occupational license is terminated, suspended, or otherwise disciplined for alleged conduct that is in violation of the act or sections 12-865-1 to 12-865-34, inclusive, of the Regulations of Connecticut State Agencies. A monthly report shall be provided to the department with names and license numbers of all licensed employees that were suspended, terminated or voluntarily departed from employment during the previous month.(t) Upon request, an online gaming operator shall provide an electronic, sortable list of all employees of the online gaming operator, who directly or indirectly impact internet games or gaming in the state, by department and position. All online gaming operators shall also maintain and provide upon request an electronic, sortable list of all online gaming service providers doing business with such online gaming operator.(u) No person whose application for a license has been denied due to the applicant's character and fitness may make another application for a license under sections 12-865-4 to 12-865-8, inclusive, of the Regulations of Connecticut State Agencies for at least one year from the date of denial.(v) All persons licensed under sections 12-865-4 to 12-865-8, inclusive, of the Regulations of Connecticut State Agencies shall notify the department within one business day of becoming aware of any licensee that has been convicted of a crime set forth in section 12-865-8(j) of the Regulations of Connecticut State Agencies or a conviction that otherwise threatens the integrity of gaming.(w) If a master wagering licensee does not utilize an online gaming operator and, instead, develops its own electronic wagering platform, the master wagering licensee will be considered both an online gaming operator and a master wagering licensee and shall be held to the requirements set forth in the act and sections 12-865-1 to 12-865-34, inclusive, of the Regulations of Connecticut State Agencies for both license types.(x) A licensee shall not directly or indirectly give, promise, or offer to any professional or amateur sporting event player or referee or other official who participates or expects to participate in any sporting event, or to any manager, coach, or trainer of any team or player or prospective player in any such event, any benefit with intent to influence the person to lose or try to lose or cause to be lost or to limit the person's or person's team's margin of victory or defeat.(y) Each person applying for a license under the act and all licensees have the affirmative responsibility and continuing duty to provide all information, documentation and assurances pertaining to qualifications required or requested by the department and to cooperate with the department in the performance of its duties, including but not limited to, any investigation conducted by the department. Any refusal by such persons to comply with a formal request for information, evidence or testimony shall be a basis for denial, revocation, or suspension of a license. No license shall be granted to any person who fails to provide information, documentation and assurances required by the act or requested by the department or who fails to reveal any fact material to qualification.(z) Prior to offering internet games to the general public, an online gaming operator shall perform a soft launch of any electronic wagering platform that the online gaming operator operates. The soft launch, which shall be a limited opening of gaming services by the online gaming operator, shall occur after written approval by the department of the online gaming operator's electronic wagering platform and all internal controls that require approval. The soft launch shall be for a period of no less than seven days and shall be offered to a limited group of patrons, as determined by the online gaming operator. The online gaming operator shall provide written notice to the department of the scope of games and patrons anticipated for inclusion in the soft launch at least ten days prior to such soft launch. For live online casino games, the soft launch requirements shall be as specified in section 12-865-18 of the Regulations of Connecticut State Agencies. This subsection shall not apply to offering fantasy contests in the state, which shall not be subject to a soft launch period.Conn. Agencies Regs. § 12-865-3