Legal sports betting nears OK
Ducey expected to sign bill into law for Arizona
Arizonans are closer to placing legal wagers on professional sports by the end of this year thanks to legislation that won final approval Monday in the state Senate.
Gov. Doug Ducey is expected to sign the bill into law, legalizing sports and fantasy betting, as well as a new keno game run by the state lottery.
Lawmakers moved companion bills, Senate Bill 1797 and House Bill 2772, through their respective chambers, giving the final approval Monday evening to the House version, on a 23-6 vote, with one member not voting.
With the passage of the legislation, Ducey also is expected to sign amendments to the gaming compacts with the state’s tribes, allowing them
The Joint Legislative Budget Committee estimates sports betting alone will bring about $15 million in revenue to the state general fund, based on fees and tax collections. The estimate is based on sports betting in Iowa, Indiana, Pennsylvania and West Virginia.
to expand casinos and offer new games such as baccarat, craps and roulette. They only offer card games such as blackjack and poker today.
Ducey won the support of tribes in the state for off-reservation sports and fantasy betting in exchange for allowing them to expand, including an unspecified number of new casinos in metro Phoenix.
Lawmakers have privately reviewed details of the compact changes Ducey has negotiated, but the Governor’s Office has only shared broad details with the public.
Ten professional sports teams and 10 tribes can acquire sports betting licenses under the bill. All can offer mobile betting.
The off-reservation sportsbooks also can offer betting at sites within five blocks of their sports facilities.
The sports-betting license holders could contract with online wagering companies such as FanDuel Group or DraftKings.
Betting on collegiate sports is allowed, but not proposition bets (bets on any aspect of a contest other than the final outcome or point spread).
How much tax revenue will state receive?
Sportsbooks would see an 8% tax rate on all revenue after subtracting payouts to gamblers.
The Joint Legislative Budget Committee, which reviews new laws to estimate their financial impact, estimates all the new gambling under the law will bring the state about $34 million in new annual revenue, but warned that the estimate is based only on broad details in the bill and the experience of other states.
States have steadily allowed sportsbooks in the wake of a 2018 U.S. Supreme Court decision.
For example, the JLBC predicts that the Department of Gaming will charge sportsbook operators $150,000 annually for their license, though that is not set in the law.
The JLBC estimates sports betting alone will bring about $15 million in revenue to the state general fund, based on those fees and tax collections.
The estimate is based on sports betting in Iowa, Indiana, Pennsylvania and West Virginia.
Under the bill, the Arizona Department of Gaming can license fantasy sports operators, who can take bets online. Gamblers can then select virtual teams made up of actual players in recognized sports and wager on them.
Fraternal organizations, veterans’ groups and horse tracks could install kiosks for fantasy betting.
The JLBC estimates fantasy betting will bring in about $1.2 million annually to the state.
Keno will be allowed at fraternal organizations, veterans’ clubs and horse tracks and off-track betting sites that have lottery licenses, or about 250 locations in the state, according to an analysis of the bill by the JLBC.
The JLBC estimates keno could bring in about $16 million annually to the state general fund.
A mobile draw game also is allowed under the bill, offering hourly drawings.
The JLBC estimated this could bring in about $2 million annually to the general fund.
Democrat: Colleagues were bought off
Count Sen. Sally Ann Gonzales, DTucson, among the few critics of the bill.
“This legislation is a sham,” she said Monday.
Earlier Monday, Gonzales held a press conference at the Capitol and blasted fellow Democrats for supporting the bill in exchange for an agreement from the governor to let them direct how $90 million in federal COVID-19 funding from the federal government is spent in the state.
She said the House and Senate would each get $45 million to allocate.
Democrats, including Sen. Rebecca Rios, D-Phoenix, have said they support the measure because Native American tribes in the state support it and Democrats want to support the tribes.
Rios said Monday that Gonzales was not being truthful and that a majority of Democrats supported the measure before meeting with the governor over the COVID-19 funds.
“This was a negotiation years in the making in which numerous tribal leaders have spoken to my caucus on numerous Zoom meetings to say this is what they want,” Rios said.
The Governor’s Office did not respond to the assertion that Ducey had promised Democrats $90 million to allocate from the COVID-19 funds, but said the sports-betting legislation and compact amendments were good policy.
“We’ve worked for years with the tribes on this,” Ducey spokesman C.J. Karamargin said Monday. “This is in everyone’s best interest.”
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.
Gonzales’ position is in conflict with the leadership of the Pascua Yaqui Tribe, where she previously served on the tribal council. The tribe supports the legislation.
Gonzales said the tribe only supports the sports betting measure because it has worked to build a third casino in the Tucson area.
And the Arizona Board of Regents also opposes the sports-betting measure because it would allow betting on college athletics. But lawmakers have silenced the universities, Gonzales said.
“They’ve gotten their marching orders,” she said. “If they want budgets for their universities, they better stay out of this fight.”
The sports betting bill is inappropriate for a number of reasons, she said, including that it will only enrich the professional sports teams in the state, with 10 of the 20 sportsbook licenses going to teams with the rest divided among the state’s 23 tribes.
It’s unfair that the tribes must compete for a license when the professional sports teams have licenses reserved for them, she said.
Gonzales tried to amend the bill a variety of ways to address her concerns, including with additional licenses for tribes so they don’t compete, but couldn’t get Democrats or Republicans on board.
Any of her amendments likely would have scuttled the deal Ducey has negotiated with the tribes.
GOP senator sought teacher funding
Sen. Michelle Ugenti-Rita, R-Scottsdale, also tried to tie up the bill with amendments, one of which would have directed some of the funds to teacher pay, a popular cause for Democrats, but she likewise didn’t get enough support to pass her amendments.
She said during the hearing on the bill that she was confounded by the bill, the way it rewards “extremely wealthy” professional sports team owners and the rush of lawmakers to “rubber stamp” the legislation.
“I have been disappointed in the process,” Ugenti-Rita said. “There hasn’t been an opportunity to engage.”