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Arizona Sports Betting Bill Passes House, Heads to Senate

Arizona Sports Betting Bill Passes House, Heads to Senate article feature image

Joe Sohm/Getty Images. Pictured: Arizona state flag.

The Arizona House easily passed a sports betting legalization bill Thursday, sending the proposal to the Senate and building hope legal wagering could come to the state.

The bipartisan, 48-12 vote sends the bill to the Senate where it must clear multiple committees and the full floor before earning Republican Gov. Doug Ducey’s signature.

The House bill — supported by Ducey, the state’s Native American gaming tribes, professional sports leagues and top sportsbook operators — could face stiffer political and logistical traction in the upper chamber. Sen. David Gowan, the Republican Senate Appropriations chair, is advancing a competing sports betting bill that incorporates historic horse racing authorization into the House bill’s framework and remains a major stumbling block.

Still, the lopsided House vote has reinvigorated supporters’ hopes that online and retail sports betting is heading toward legalization in Arizona.

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House Bill Details

The House bill would permit up to 10 mobile and retail gaming licenses for Native American tribes and 10 more for professional sports teams. Certain pari-mutuel horse tracks and off-track betting parlors could apply for one of 10 additional retail-only sports betting licenses.

Daily fantasy sports would also be legalized and regulated in the bill. Arizona is among a handful of states without operating DFS providers.

Ducey championed the bill as part of more substantial negotiations with the tribes on the gaming compact, the overarching agreement that regulates the state’s tribal gaming. Multiple tribal leaders supported the bill and the compact during hearings last month.

Ducey’s office and the tribes say they have an agreement in principle but are awaiting legislation such as the sports betting bill before finalizing the deal.

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Visions of America/Universal Images Group via Getty Images. Pictured: Replica of Liberty Bell in front of Arizona State Capitol Building at sunrise.

Top sportsbooks such as FanDuel, DraftKings and BetMGM are also behind the bill. These and other leading brands such as William Hill, PointsBet and Penn Nationals’ Barstool Sportsbook would also likely seek market access.

If passed, Arizona would join Illinois and Washington D.C. as the only jurisdictions with in-stadium sportsbooks. The Arizona Cardinals, Arizona Diamondbacks, Arizona Coyotes and Phoenix Coyotes would all receive sportsbook licenses, as would the TPC Scottsdale golf course, home of the PGA Tour’s annual Phoenix Open, and the Phoenix Raceway motorsports track.

Sponsor Rep. Jeff Weninger said before Thursday’s floor vote that the remaining four licenses could be eligible for other professional sports leagues and a future franchise relocation incentive.

Officials estimate the new gaming expansion would generate as much as $42 million in annual tax revenues at maturity, depending on market participation. State gaming regulators would also need to promulgate sports betting rules and licensing fees, among other regulations.

Supporters hope sportsbooks could accept initial wagers in late 2021 or early 2022 if Ducey signs the bill into law by the legislative session’s June conclusion.

Historic Horse Racing

The House bill’s Senate companion was passed over in committee and instead incorporated into a separate historic horse racing (HHR) legalization proposal. HHR terminals, which allow wagering on previously conducted horse races and act like slot machines, are vehemently opposed by the tribes.

The tribes consider this a revenue threat, and the sportsbook operators, which would not benefit from HHR terminals, will not support the current Senate version. This threatens the delicate House bill coalition and the broader compact negotiations.

Politics Shape Next Steps

This sets up a collision course between the sports betting collation-backed House bill and Gowan’s hybrid HHR proposal.

The House bill will have to pass through Gowan’s Appropriations Committee before it goes to the Senate floor. He sponsors the HHR bill, which he and supporters in the equine industry say will bring more than $100 million in economic impact and thousands of new jobs.  As chair, Gowan can typically advance bills he supports and dismiss those he does not.

House bill backers are hoping Republican Senate President Karen Fann’s support, as well as the lower chamber’s resounding bipartisan support, can muster enough votes to circumvent opponents.

The competing proposals create an unusual split between members of both parties. Republicans such as Ducey and Fann are running into conservative opposition from other high-ranking party members such as Gowan, a former House speaker. The GOP has narrow control of both chambers, meaning Republicans can largely determine if and how bills advance to floor votes but need Democratic votes to pass bills without the entire caucus’ support.

Democrats have been more receptive to the House bill than the Senate’s, but support has not been universal. House Minority Leader Reginald Bolding questioned revenue generation and license allocation before Thursday’s floor vote. Other Democrats before both House and Senate bill votes also questioned sports betting in general, worrying about identity protection, operator eligibility and lawmakers’ role in the compact negotiating process, among myriad additional concerns.

The Senate bill is likely too politically toxic with historic horse racing to pass on to Ducey’s desk, and the governor seems disinclined to sign a bill that jeopardizes the sports betting legislation and tribal gaming compact he had spent months negotiating.

That means the House bill carries legal sports betting’s 2021 hopes as it awaits the Senate’s next action. Political and logistical hurdles remain, but Thursday’s vote gives this year’s best sports betting prospect momentum going forward.

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