Arizona Sports Betting Bill Looks to Get Back on Track

Arizona Sports Betting Bill Looks to Get Back on Track article feature image
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Christian Petersen/Getty Images. Pictured: The Phoenix Suns Gorilla.

After an unexpected delay, Arizona’s sports betting legislation backers are hoping to regain momentum this week.

A House committee last week advanced a sports betting bill, 9-1, but a Senate committee delayed voting on the companion bill a day later. Now, backers are looking to restart the complex sports betting process.

The House Rules Committee began that push when it determined Monday the sports betting bill was constitutional, a perfunctory determination that nevertheless moves the bill forward.

Sports betting backers now await the second shot to advance the Senate’s bill out of the commerce committee when it meets later this week.

Supporters are also following a separate, unrelated gaming bill that adds another variable to the precarious work of legalizing sports betting.

Historic Horse Racing Bill Could Alter Sports Betting Path

A Senate committee is set to consider a bill that would allow historic horse racing terminals at horse racing tracks. The terminals allow players to wager on previously conducted races and function similarly to slot machines.

Legal in a handful of states, these machines are oftentimes more lucrative for the tracks than live pari-mutuel horse racing.

Arizona racing advocates estimate live race attendance has declined 45% since 2004, and that handle has dropped $55 million a year during that time. Save Arizona Horse Racing projects the HHR bill would create nearly 4,000 new jobs and generate more than $100 million in tax revenues.

Republican Sen. David Gowan, the former Arizona House Speaker now serving his first term in the Senate, is spearheading the HHR proposal. Gowan chairs the powerful Appropriations Committee, which is set to take up the first vote on the bill later this week.

Gowan’s bill has the state racing industry’s backing, but it is vehemently opposed by Native American gaming tribes. The tribes fear expanding slot-like options at horse tracks would threaten their patronage.

More critically, it could jeopardize the overarching gaming compact as it nears completion.

Republican Gov. Doug Ducey said the compact, which regulates and governs tribal casinos and their relationship with the government, has been agreed to in principle.

The compact would open the door for online and retail sportsbooks at tribal casinos as part of a larger deal that would expand other, more lucrative gaming options.

Any HHR legislation from the GOP-run legislature could put Ducey in a difficult situation should the tribes withdraw support for the compact. And, without the compact, sports betting seems like a legislative impossibility.

Sports Betting Bill Details

The companion sports betting bills in both the House and Senate would allow sports wagering licenses for horse tracks as well as tribal casinos and professional sports stadiums.

Not surprisingly, representatives from several Arizona professional sports franchises and Native American tribes testified in favor of the bill.

Officials from DraftKings, FanDuel and BetMGM also support the legislation, which would allow these sportsbook operators — and others — to partner with casinos or the professional sports venues.

Additionally, Ducey has championed the bill as part of the larger gaming compact negotiations. Ducey’s office projects legal wagering under this proposal could generate as much as $42 million in annual tax revenues at market maturity.

Having the tribes, leagues, sportsbook operators and governor’s office on board had stakeholders optimistic a deal is imminent. However, any major development as significant as HHR terminals threatens the alliance behind the sports betting bill.

Next Steps for Arizona Sports Betting

Two meetings later this week could help determine sports betting’s hopes for 2021.

The Senate Appropriations Committee is slated to take up the HHR bill at its 2 p.m. local time meeting Tuesday. The Senate Commerce Committee is scheduled to consider the sports betting bill it passed over last week at its next meeting Wednesday at 2 p.m. local time.

The HHR bill could loom large at Wednesday’s commerce committee meeting if passed by the appropriations committee a day earlier. Four senators serve on both committees, which could give a sense of sports betting’s standing ahead of Wednesday’s expected vote.

The separate bills have no impact on each other tangibly but could kill one or both politically.

The industry-backed push for HHR terminals could build legislative support, especially with influential lawmakers such as Gowan behind it, but it could also jeopardize the progress made toward a sports betting bill all other stakeholders support.

Having already cleared several early hurdles, moves this week could very well determine if sports betting will continue its long journey through the legislature or if it will face blowback that makes legalization even more difficult.