Arizona Department Of Gaming Asks For Help With Sports Betting

Recent public comment meetings on draft rules for sports betting have shown that the Arizona Department of Gaming is faced with a challenge unlike that of any other state’s regulators in legalizing sports wagering.

Perhaps due to its inception as a compact agreement, legislation has often left major policy decisions to regulators. These include determining the number of online betting skins or brands permitted, setting license fees, deciding the tax rate, and allocating licenses.

Considering the unusual nature of these regulatory demands, it’s unsurprising that the Arizona Department of Gaming (ADG) initially excluded these policy issues from its draft rules.

Ted Vogt, ADG director, urged stakeholders for their feedback on certain policy issues during two virtual meetings that ended on Monday. However, he received minimal assistance.

Stakeholders desire a single online sports betting platform.

Of the four major policy issues, stakeholders only wanted to publicly address Skins.

David Miller from the PGA Tour/TPC Scottsdale, Joe Solosky from NASCAR, Amilyn Pierce from the Arizona Diamondbacks, Andrew Diss from the Arizona Coyotes, and Andrew Winchell from FanDuel all backed one skin.

Pierce stated, “Being part of the discussions regarding the legislation, I can confidently assert that we always believed it would only be one skin.”

Matt Olin, the CEO of Apache Gaming Enterprise, expressed disagreement. He contended that the initial draft of the legislation presented to the House did not consider multiple skins. However, this was revised and altered in the final version.

The law suggests that an event wagering operator “may use multiple event wagering platforms.” However, according to Pierce, this clause implies that a licensee has the option to use different platforms for mobile and retail.

Olin was the sole speaker advocating for multiple skins. If Arizona were to have a single skin, they could potentially accommodate up to 20 mobile sports betting apps.

How will the Department determine tribal licenses?

What raised eyebrows about the Arizona law was its provision allowing ten licenses to professional sports entities, despite the state not having that many sports teams. The law also caps tribal licenses at 10, even though there are 22 gaming tribes in the state, sixteen of which run casinos.

It’s possible that the tribes might agree to share revenue, with only 10 applying for mobile sports betting licenses. However, if the number of applications exceeds the available licenses, the ADG will face the challenging task of deciding which tribes are more deserving.

Vogt stated, “Arizona is home to 22 tribes. Suppose all of them wanted to obtain a license, but only 10 were available. What kind of procedure would you suggest the state should use to distribute those licenses, especially in a scenario where there are more eligible applicants than licenses available?”

All tribes in the state are allowed to offer retail sports betting at their casinos under compact agreements.

Sports teams or tribes must be partnered with by racetracks.

It appeared to surprise racetracks that they are required to collaborate with a licensed event wagering operator to provide retail sports betting at their facilities.

This development was unbelievable to Dave Auther, the co-owner of Arizona Downs.

Does the agreement we need to make with a sports club to become a limited event wagering operator imply that a certain portion of our earnings will have to go to a licensed club? So, to enter the game, do we need to pay additional money to a club?

Vogt stated that a contract would be required between a limited wagering operator and a holder of a master license, which could be a sports entity or a tribe.

“Is it money, goodwill, or friendship that would motivate a master licensee to contract with us?” Auther responded.

Auther also didn’t grasp the procedure for obtaining limited event wagering licenses. He elaborated that the state has three racetracks, and approximately 40 off-track betting locations act as their satellites.

He surmised that a restricted event betting license would enable sports betting for every track and all its OTBs. However, Vogt clarified that sports betting would be available for a total of 10 racetracks and OTBs.

“Auther stated, “We believe this is significantly restricting our access to sportsbooks, and we would object to that.”

What is the future of sports betting in Arizona?

The ADG is swiftly working to launch sports betting before the commencement of the NFL season.

Vogt expressed his hope to release a revised draft of sports betting regulations by the end of the week. This will encompass an updated schedule for the vote on the final rules and the initiation of licensing.

It’s possible that stakeholders contributed more input on tax rate, license fees, and license allocation through written comments.

Vogt acknowledged that Arizonans are eagerly anticipating the introduction of event betting and fantasy sports. He noted their long wait and stated that the Department has accordingly set an ambitious schedule to launch these services. Their current goal is still to go live by September 9, aligning with the start of the NFL season.