Arizona Making a Bid for Legal Sports Betting

The idea of legal sports betting in the state of Arizona has been a contentious one to say the least. Proposals have been presented only to be shot down the last few years. But there is a serious sense of optimism that something could finally get done in 2021 and that everybody involved, from state legislators to Arizona’s gaming tribes to the betting public may finally find some common ground.

The last week or so has been characterized by legislative wrangling with regard to legal sports betting. While some branches of the Arizona legislature are plowing through with plans to legalize, other have been stalling and dragging what has been a fairly seamless process to a halt.

What We Know So Far

There seems to be a strong appetite for a legal sports betting bill in Arizona. The best proof of that came in Gov. Doug Ducey's State of the State address in January in which he mentioned his desire to get something done. Since then, there has been a ton of developments on the topic with all branches of Arizona government involved.

Two joint proposals are presently in the House and Senate — HB 2772 and SB 1797. The Arizona House met last week with legal sports betting on the agenda and passed the bills 9-1. This after the Rules Committee passed it on following a 6-2 vote and a few amendments. Both bills are less-than complete and open for interpretation but are necessary in order to move on to the next step.

Following the 6-2 vote is when the Bills were sent to the Senate Commerce Committee where it has been bogged down since. Maybe it is because there is some late opposition to the legalization plan, or maybe more time is needed before hammering out a final draft.

As it stands, sports provider application fees have been left up to the Arizona Department of Gaming and the tax rate is yet to be determined.

Tribal Compacts

Like a handful of states looking to legalize sports betting, their jurisdictions will need to amend tribal compacts and involve its state's tribes in any legal sports betting decision. Tribal compacts in Arizona were set to expire in 2022 but Governor Ducey has apparently renegotiated those deals with the tribes already. And some sort of legal sports betting was apparently part of those negotiations.

There is a problem that exists in the way the legislation is structured in relation to the state's Tribes, however. As it stands, lawmakers are trying to pave the way for a total of 20 sports betting licenses. There are 16 tribes with 24 casinos in Arizona meaning that a few locations could be left out in the cold. Pro sports venues have also been mentioned as possible licensees. That may not sit well with some, although there has yet to be any pushback by the tribes.

Sports Teams and Sportsbooks Support

Arizona sports teams have signaled their support for a legal sports betting platform. They, like the tribes could be in line for their own licenses which would take away from the Tribes' ability to keep their virtual monopoly on the platform.

Representatives from the Phoenix Coyotes, Arizona Cardinals, Arizona Diamondbacks, PGA Tour and Phoenix Raceway have all voiced their support recently. Their ability to gain a sports betting licence for their venues and profit off of a legal platform keeps Arizona teams on level playing field with teams in other states. Partnering with sportsbook operators as a revenue generating focus is also an important option for teams involved.

Of course, sportsbook operators have come out in favor of an Arizona legal sports betting platform as well. BetMGM and the two DFS giants have spoken up in favor of a platform that would allow them to partner with Arizona casinos or its sporting venues and reap the rewards seen in other similar sports betting jurisdictions.

What's on the Line

This week will tell us a lot about the chances of a legal sports betting platform in Arizona. There are meetings scheduled throughout the week, all of which will be taking on the subject of legalization. Arizona is the 14th largest US state in terms of population with 7.3 million residents and a rabid sporting culture from its college teams to the representatives from each of North America's 4 major sports.

As it stands, Arizonans don't even have a legal DFS platform in their state - it is estimated that 1 million residents spend up to $3 billion per year on the black DFS market. Adding legalizing DFS and sports betting in the state could result in $42 million annually in taxes to its general fund, according to Compass Strategies managing partner Kelsey Lundy, making legislators’ pursuit certainly worthwhile. Lawmakers technically have until the end of the legislative session, April 24 to hammer something out. There is no shortage of hurdles however for the platform in a state that has tried unsuccessfully numerous times to bring in legal sports betting. But this week will tell us a lot. Stay tuned!