Arizona Inches Closer To Sports Betting As Bill Heads To Senate

Ongoing efforts to legalize sports betting in Arizona may finally be bearing fruit.

HB 2772, sponsored by Rep. Jeff Weninger, passed the State House by a wide margin (48-12) after the House Rules Committee – which Weninger chairs – approved it by a 9-1 vote last month.

The legislation now heads to the Arizona Senate, and there is a real chance that it could land on the governor’s desk to pass into law. Gov. Doug Ducey is in complete favor of the legislation.

Key Features of HB 2772

  • Players located in Arizona, 21 years old and up, may bet on professional and college sports at retail sportsbooks, websites, and through mobile betting apps
  • Up to ten sports betting licenses for professional sport franchises/operators such as the Arizona Cardinals (NFL), the Phoenix Coyotes (NHL), and golf courses that host annual PGA Tour events
  • Up to ten sports betting licenses for tribal gaming operators
  • Sports organizations may require the use of official data for in-play betting
  • Authorizes electronic keno machines at racetracks and some fraternal and veterans organizations not within five miles of a tribal casino
  • Authorizes mobile draw games operated by the lottery, available “over the internet, including on personal electronic devices”

Rep. Weninger, quoted in Chamber Business News, spoke about HB 2772:

“It helps with the engagement of the game and with the teams here. If people are making bets, it helps our revenue in the state and helps businesses in the state with people going out to bars and restaurants.”

Breaking a Tribal-State Deadlock

If passed, HB 2772 would overcome some of the barriers set by the Arizona Tribal-State Gaming compacts of 2002. Under this agreement, tribes may operate casinos on or off tribal land, but there is no scope for sports betting.

Sixteen tribes currently operate casinos in Arizona, and the compact allows for 24 casinos.

Efforts were made in previous years to pass sports betting laws but struggled to make any reasonable passage because of the implications between tribes and the state. If HB 2772 passes, the 2002 compacts will need to be renegotiated.

At present, tribes pay around 8% of their casino revenue to Arizona, and it’s believed that the amount will decrease if sports betting legislation is passed. The current compacts are set to expire over the next few years.

In 2018, despite concerted efforts to pass sports betting legislation, lawmakers opposed a similar law because it violated gaming compacts with the tribes.

“Wagering on historic racing through the use of player terminals has been prohibited in Arizona since before May 1, 200,” State Attorney General Mark Brnovich said at the time. “Any change to Arizona’s pre-May 1, 2002 gaming laws could cause one of the signatories to the Arizona Tribal-State Gaming Compact to initiate action under Compact section 3(h)(1), which would limit the State’s ability to regulate some aspects of tribal gaming and dramatically decrease the revenues the tribes must provide to the State.”

But in his State of the State address in January, Governor Doug Ducey called on legislators to pursue a “modernized” tribal gaming compact, explaining it could be done by opening the door to legal sports betting and fantasy sports.

“The renegotiated compact is intended to maintain the current culture of gaming in the state, allow for limited, well-regulated gaming while allowing for modernization, and increase revenue to the tribes and to the state,” he said.

The bill also has the support of tribes if it is tied to the renegotiated compacts. The governor of the Gila River Indian Community told a House hearing that 18 out of the state’s 22 tribes support the sports betting bill as part of the compact.

Sports teams and other organizations such as the PGA Tour, Arizona Cardinals, DraftKings, BetMGM, and FanDuel also support the legislation.

Small Businesses Left Out

While it may seem that everyone favors changes to gambling laws in Arizona, one segment of the industry is feeling left out. Bars and restaurants will not be allowed to license online sportsbooks under the new legislation. That scenario is currently playing out in several states.

The Arizona Licensed Beverage Association president, Dave Delos, lamented that the pandemic already impacted small businesses throughout 2020. By including them in new legislation, he said, these businesses “can get a piece of this revenue opportunity.”

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