Arizona Sports Betting Bill Advances After Marathon Hearing

An Arizona Senate committee advanced a sports betting legalization bill Wednesday, a major step forward that further bolsters legal sportsbooks' hopes after the House advanced the companion bill days earlier.

The Senate Commerce Committee advanced the bill 6-3 after three hours of witness testimony, questioning and deliberation. It now goes to the Senate Appropriations Committee's Feb. 23 meeting, and a positive vote there could send the bill before the full Senate floor as early as next month.

Senators peppered officials from the governor's office, professional sports leagues, sportsbook operators and Native American tribes on a myriad of concerns including; license allocation, tax rates, market participation, geofencing technology and revenue generation, as well as multiple portions of the bill's granular, technical language.

Others wondered why some licenses allowed under the bill were tethered to professional sports teams, instead of entering the Arizona market without any affiliation. Members of both parties furthered questioned how sports betting related to larger negotiations surround the state's tribal gaming compact, with several saying they felt the governor's office had kept them in the dark during negotiations.

When explaining their votes, only Sen. Tony Pace specifically said he opposed sports betting as a part of larger gaming expansion. However, the barrage of questions showed policymakers had significant concerns about legal wagering's structure.

The two other no votes were Sen. Jamescita Peshlakai, who represents multiple Native American reservations in her district, and committee Vice Chair Michelle Ugenti-Rita.

Still, despite the issues, the committee advanced the bill.

Sports betting backers are now redoubling efforts to advance the House bill while continuing to work on wavering senators. The House Commerce Committee passed a companion version of the bill last Tuesday and it was advanced by the House Rules Committee a few days later.

The legislation can not pass into law without majority support in both the House and Senate.

This early momentum, led by a diverse group of stakeholders driving the legislation, has built hopes it can pass quickly. However, Wednesday's lengthy Senate committee hearing shows there are still major concerns going forward.

Sen. Rosanna Gabaldon, who voted yes, said she would reconsider a potential vote on the full floor if some of the aforementioned concerns weren't addressed.

Attention on Historic Horse Racing

Even before Wednesday’s Senate committee vote, sports betting backers were watching an unrelated gaming bill that also complicates legal wagering legislation.

The Senate Appropriations Committee Tuesday did not take up a bill that would allow certain horse tracks and off-track betting facilities to install thousands of historic horse racing (HHR) terminals. HHR players bet on previously conducted horse races where they can “handicap” races or allow the machine to do it for them, which creates an experience similar to a slot machine.

The HHR Bill comes as the tribes and Gov. Doug Ducey are finalizing a comprehensive gaming compact that would expand tribal wagering options and clear the way for legal sportsbooks, but legalized HHR machines could upend negotiations.

Anni Foster, the governor's general counsel, confirmed at Wednesday's hearing the tribes were awaiting the progress of other gaming legislation before finalizing the compact.

The HHR bill’s sponsor is Sen. David Gowan, a former state speaker of the House and current chair of the Senate Appropriations Committee. The sports betting bill now goes to Gowan’s Appropriations Committee; how he handles the two major gaming bills could determine Arizona’s legal sports betting fate.

Sports Betting Details

The sports betting proposal comes after years of negotiations between Ducey, the tribes, sportsbook operators and Arizona professional sports leagues. A bipartisan group of Democrats and Ducey’s fellow Republicans supports the bill as well.

If passed, Arizona tribes would be able to open online and retail sportsbooks. Professional sports venues with at least 15,000 seats, including the Phoenix Raceway and TPC Scottsdale, could also open sportsbooks.

Certain horse racing tracks and fraternal organizations could also accept bets.

Ducey’s office; sportsbooks including DraftKings, BetMGM and FanDuel; the Phoenix Coyotes, PGA Tour, Arizona Diamondbacks; and the tribes have all testified in support of the sports betting bill.

Gila River Indian Nation Governor Stephen Roe Lewis said at Wednesday's hearing that 18 of the state's 22 tribes supported the sports betting bill as part of the larger compact. However, If the tribes withdraw support due to the HHR bill, the gaming compact is in jeopardy and so, too, is legal sports betting.

Next Steps

The Senate Appropriations Committee could take up both the HHR and sports betting bill as early as next week. The committee could also postpone further action on one or both bills to give policymakers and gaming stakeholders more time to negotiate between competing interests.

Meanwhile, the bill’s House companion continues advancing and could get a vote before the full floor in the coming weeks. Sports betting backers are still hopeful quick action in both the House and Senate could begin legal wagering in the coming months, but that largely depends on how lawmakers handle historic horse racing – and assuage certain senators concerns.

Stakeholders and supporters inside and outside the legislature are hoping to build Senate support, answer the wide range of questions expressed Wednesday and get a “yes” vote on both the House and Senate versions. Much can change in the statehouse in the coming months, and Wednesday’s vote laid bare lawmakers' concerns with the framework for legal wagering could derail Arizona’s 2021 sports betting hopes.

Despite these obstacles, Wednesday's marathon committee meeting gives legal Arizona sports betting a major push forward.