Arizona Online Sports Betting Legalization Bill Passes Legislature

Arizona Online Sports Betting Legalization Bill Passes Legislature article feature image
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Michael Brochstein/SOPA Images/LightRocket via Getty Images. Pictured: Arizona Gov. Doug Ducey.

Arizona lawmakers have passed an online and retail sports betting bill Monday that will allow as many as 20 statewide mobile operators and some of the nation’s first in-stadium sportsbooks.

After weeks of legislative delays, the Arizona Senate approved the bill 23-6, a vote which drew support and opposition from members of both parties. The House passed a companion version of the bill 48-12 last month with similar bipartisan backing that transcended party lines.

Sen. Rebecca Rios, the Democratic Senate minority leader, introduced an amendment backed by Republican sponsor Sen. T.J. Shope that aligned the bill with the House bill and allowed it to pass out of the legislature Monday evening, underscoring bipartisan support helped the bill cross the finish line.

Gov. Doug Ducey championed the bill and is expected to sign it into law as early as this week. It will also legalize daily fantasy sports in one of the few remaining states where it is explicitly illegal.

Backers are now hoping state gaming regulators can license sportsbooks in the next few months with goals of initial launch ahead of the 2021 football season.

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Bill Details

Arizona’s law permits as many as 20 total online operators, 10 apiece split between Native American tribes and professional sports organizations.

The Arizona Cardinals, Arizona Coyotes, Arizona Diamondbacks, Phoenix Suns, TPC Scottsdale (home of the PGA TOUR’s Waste Management Phoenix Open) and Phoenix Raceway (host of multiple annual NASCAR and IndyCar events) could all partner with an online operator. Each team could also open retail sportsbooks in their stadiums or, in certain cases, in nearby commercial properties.

Arizona could be one of the first states with in-stadium retail sportsbooks. Washington D.C.’s Capital One Arena has the nation’s only open in-stadium retail book in “Big Four” professional team sports venues. Illinois law also permits in-stadium sportsbooks and Virginia permits sportsbooks at its major auto sports venues. Maryland passed an in-stadium wagering bill Monday.

The six aforementioned sports organizations could hypothetically open sportsbooks as early as this year. The other four licenses designated for pro sports groups could go to a different team or league that hosts a franchise in the state, such as MLS; Phoenix is reportedly in the running for the league’s 30th franchise.

Arizona has nearly two-dozen recognized tribes, but Native American gaming leaders testified earlier this year that not every tribe would pursue an online license. Interested tribes with multiple brick-and-mortar gaming establishments or casinos could open a retail sportsbook at every facility with each individual tribe’s licensing counting as one “license.”

The bill also allows certain sportsbook licensing rights to horse tracks and off-track betting facilities.

Background

Ducey’s office, the tribes and pro sports teams all supported the bill and lobbied on its behalf throughout the legislative process. Top sportsbooks, spearheaded by DraftKings, FanDuel and BetMGM, also testified in the bill’s favor during committee hearings.

The bill easily cleared the House with bipartisan support last month, but stalled in the Senate. A companion bill didn’t receive a vote in the influential Appropriations Committee, chaired by Sen. Dave Gowan. A former House speaker, Gowan instead advanced a competing bill that added historic horse racing terminal authorization to the original mobile sports betting bill.

The tribes opposed any bill that included historic horse racing terminals, which act like slot machines, arguing they violated previous gaming authorization. The sportsbooks also refused to support any bill opposed by the tribes.

This also jeopardized larger talks between Ducey and the tribes around a new gaming compact. The sports betting legislation was contingent on a new tribe-approved deal between the government and Native American casino operators that gives the state a portion of gaming revenues in exchange for certain gaming rights.

The two groups are expected to announce a finalized gaming compact in the coming days or weeks that will, among other areas, allow additional tribal gaming facilities in the Phoenix area.

After weeks of legislative stalemate, lawmakers reached a breakthrough that would allow the league and tribe-backed House sports betting bill to reach the full Senate floor. Since the Senate didn’t amend the original House bill, Monday’s affirmative vote advanced it fully out of the legislature and on to Ducey’s desk.

Next Steps

Assuming Ducey’s signature this week, lawmakers are hopeful legal wagering can begin ahead of football season 2021. The bill also passed with two-thirds supermajority support for “emergency” authorization, which should expedite the launch process.

The Arizona Department of Gaming will have to approve further rules and each sportsbook’s license, a process that has taken between three and 18 months in other states.

Arizona’s young, growing population and teams in America’s most popular pro sports leagues should spark interest from all top sportsbook brands. Along with the previously mentioned supporters, additional leading brands such as PointsBet, Caesars/William Hill, Barstool Sportsbook and many others will likely apply.

The legislative back-and-forth may have taken longer than Arizona sports bettors would have hoped for, but the state’s elected officials have now passed a major bill to permit online sports wagering in one of the more dynamic, growing U.S. markets.

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