Sports betting could soon come to Arizona as impasse on legislation appears resolved
Arizona lawmakers appear to have broken a logjam holding up legislation that will allow sports betting in the state, which the bill's sponsor said could get a final vote as soon as Monday.
Passing Senate Bill 1797 would not only allow sports and fantasy betting in Arizona, along with a new Keno game run by the lottery, but the legislation also is key to the governor signing new gaming compacts with Arizona tribes, allowing them to expand their casinos and offer new ways to gamble.
While the House already passed a mirror bill, senators from both parties have had concerns about the details of sports betting and the tribal expansions, and the legislation was stalled for more than a month.
The bill's sponsor, Sen. T.J. Shope, R-Coolidge, said Thursday he expects it to breeze through final committee votes and the full Senate early next week.
States have steadily allowed sportsbooks in the wake of a 2018 U.S. Supreme Court decision, but tribes in Arizona have until now opposed any off-reservation gambling.
Gov. Doug Ducey opened the legislative session this year announcing he reached a tentative deal with the state's tribes to allow them to expand their casinos, including an unspecified number of new casinos in metro Phoenix, in exchange for the tribe's endorsement of sports betting off the reservations.
The governor said he has the authority to privately negotiate changes to the tribal gaming compacts and will do so if the Legislature passes the sports-betting legislation. Lawmakers have privately reviewed details of the compacts, but the Governor's Office has not shared them with Arizonans at large.
Tribes also could run 10 of the 20 sportsbooks allowed under the legislation.
"The Governors Office did a very good job in making sure that every member who actually wanted to go up and view the compact and understand what they were singing on to had the opportunity to do so," Shope said Thursday, adding that he believes it will have a two-thirds majority vote to pass with an emergency clause to make it effective immediately upon the governor's signature.
Sen. Rebecca Rios, D-Phoenix, confirmed to The Arizona Republic on Thursday that all but perhaps one of the minority party senators would support the bill.
"People's comfort level changed over time and in the Republican caucus I always had from seven to 10 votes," Shope said. "So we knew the numbers were there once the Ds came along."
Shope said the bill was a good opportunity to keep gambling revenue in the state.
"We already have other forms of gaming in Arizona," he said. "We have accepted gambling as a vice for many years in this state. To add sports betting and fantasy football, most people don't realize that when they enter a pool with their friends they are violating Arizona law ... To make it legal to do so was important to me."
Senators had a list of concerns
In February, Senate leaders from both parties wrote to the governor with concerns over the legislation.
"Leadership has identified critical elements necessary for an information-based vote on the merits of the proposal," said the Feb. 17 letter signed by Senate President Karen Fann, R-Prescott, and the leadership from both the Republican and Democratic parties in the Senate.
The other signatories to the letter included Rios and Sen. David Gowan, R-Sierra Vista. Gowan stalled the legislation in the Senate Appropriations Committee, which he chairs, and tried unsuccessfully to tack the sports-betting bill onto another bill to allow expanded gambling at horse tracks.
The tribes oppose that expansion andthe bill was withdrawn from Gowan's committee Thursday.
Lawmakers asked Ducey:
- How much the Department of Gaming would charge for a sports betting license to the 10 professional sports teams and 10 tribal gaming enterprises that would be allowed to offer sports betting.
- What tax rate sports betting and fantasy sports operators would pay.
- How tribes will operate mobile sports betting, which is allowed in the bill, and what tax rate tribal sports betting operators will pay when they are not on reservations.
And lawmakers had questions on the legality of the deal the governor has described, including:
- If a "rate freeze" on tribal gaming contributions the Governor's Office has described in the deal is legal. "That appears to conflict with the specific contribution rate schedule enacted by Proposition 202 (approved by voters setting up the framework for tribal gaming in the state)," the letter said.
- Whether the emergency clause in the legislation is compatible with another element of the legislation that states the law is conditional upon the official enactment of the tribal gaming compacts.
Ducey's office did not respond Thursday to questions about the letter.
The bill still needs approval from the Rules Committee before moving to a full Senate vote, and six of the lawmakers who signed the letter to Ducey sit on the Rules Committee, including Rios.
But Rios said most of the concerns were addressed.
"A lot of those questions were addressed through individual and group meetings with governor's staff," Rios said Thursday.
She also said that the Democrats wanted to support the tribes, who wholeheartedly endorsed the bill and the casino expansions they would get in return.
"They were very happy with how the bill read and what they negotiated," Rios said. "They made their point very well know. They didn't want meddling in it."
Gowan didn't return a call for comment Thursday, but he apparently was lobbied by a former professional hockey player on the bill.
Shope on Wednesday posted on social media a picture of himself with Shane Doan, a former player and current employee of the Arizona Coyotes professional hockey team, at the Capitol. Doan presumably was there to endorse the measure, which would allow the Coyotes franchise to apply for a sports betting license.
Shope said he bumped into Doan and took the opportunity to get a picture with him as a fan, and that he didn't bring the star to the Capitol, but that Doan was there to speak with Gowan.
"I’d like to thank 'Captain Coyote' Shane Doan, for stopping by the State Senate yesterday to give me a hand in moving SB1797/HB2772 (Fantasy Sports Betting; Event Wagering) forward to an up-or-down vote! Stay tuned because there’s big news to come on this front!" Shope wrote on Twitter.
Tribes could offer new games
Sixteen tribes run 25 casinos in Arizona, according to the Department of Gaming, and another six have slot machine rights they can lease to other tribes. Tribes pay 1% to 8% of their gambling revenue to state and local governments.
Arizona tribes can offer only card games such as blackjack and poker under the current agreements. The amendments Ducey is negotiating could include new games such as baccarat, craps and roulette, according to the Governor's Office.
The tribes also could expand their offerings with the 10 sports betting licenses offered to them through the legislation.
Amendments to the tribal compacts must receive approval from the U.S. Department of Interior. The new sports betting bill and other laws would not take effect until the compacts are posted to the U.S. Office of the Federal Register.
In the last fiscal year, which ended in June, tribal casinos had more than $2 billion in revenue and contributed more than $102 million to the state, according to the Department of Gaming.
Under the legislation, the sports-betting license holders could contract with online wagering companies such as FanDuel Group or DraftKings, both of which are supporting the bill.
Arizona already falling behind
Arizona already is falling behind other states that have launched sports betting since 2018.
Twenty states and Washington, D.C. now allow sports betting, while it's legal but not yet operational in five others. Fourteen more states have pending legislation, according to the American Gaming Association. Only seven states have no legislation on the issue as of this year, and in three states, legislation has died this year, according to the gaming association.
Iowa, for example, enacted sports betting in 2019, and with the NCAA basketball tournament in March, saw nearly $160 million wagered for the month, according to PlayIA.com, which tracks sports gambling in the state.
The Iowa Hawkeyes defeated Grand Canyon University's Antelopes in the tournament, and the state of Iowa collected nearly $1 million in taxes from sportsbooks for the month thanks to increased betting from the tournament, according to PlayIA.com.
Reach reporter Ryan Randazzo at firstname.lastname@example.org or 602-444-4331. Follow him on Twitter @UtilityReporter.