Regulators in Arizona are on the threshold of accomplishing something incredible.
On April 15, Gov. Doug Ducey wielded a pen and scribbled his name on legislation that would legalize sports betting in Arizona.
At the time, lawmakers celebrated. But they knew an arduous, and admittedly lofty, task awaited. After all, the goal was to get the newly legal wagering industry off the ground in time for the 2021 NFL season, set to kick off Sept. 9.
In less than five months.
Improbable? Absolutely. Impossible? Not if you’re with the Arizona Department of Gaming. With the regulatory body now accepting applications, getting the first sports betting operators licensed and launched in the Grand Canyon State by pro football’s opening night seems as realistic as ever.
Can AZ sports betting launch by Sept. 9?
The Arizona Department of Gaming (ADG) is nothing if not confident.
The department has never wavered from its Sept. 9 target date for launch — one that “for sure” is for mobile betting apps in Arizona, though retail sportsbooks “could be in place to a certain extent,” according to Maxwell Hartgraves, public information officer with the ADG.
“Our ultimate goal is to meet that Sept. 9 launch date but also do it efficiently and responsibly. I think we’re meeting all those criteria.”
After finalizing sports betting rules July 26, the ADG opened the application process for parties interested in offering regulated wagering. That left 45 days to review/approve applications and perform internal control checks/testing. Forty-five days. Only three other states in the country accomplished that in such a short span.
|State||Regulations Finalized||Launched||Time Elapsed|
|New Jersey||June 13, 2018||June 14, 2018||1 day|
|Indiana||Aug. 28, 2019||Sept. 1, 2019||4 days|
|Iowa||July 30, 2019||Aug. 15, 2019||16 days|
|Arizona||July 26, 2021||Sept. 9, 2021||45 days|
|West Virginia||June 21, 2018||Aug. 30, 2018||70 days|
|Colorado||Feb. 20, 2020||May 1, 2020||71 days|
|Mississippi||May 17, 2018||Aug. 1, 2018||76 days|
|Illinois||Dec. 19, 2019||March 9, 2020||81 days|
|Michigan||Dec. 20, 2019||March 11, 2020||82 days|
|Pennsylvania||Aug. 15, 2018||Nov. 15, 2018||92 days|
|Virginia||Oct. 12, 2020||Jan. 21, 2021||101 days|
|Arkansas||Feb. 22, 2019||July 1, 2019||129 days|
|New Hampshire||Aug. 7, 2019||Dec. 30, 2019||145 days|
|Rhode Island||June 22, 2018||Nov. 26, 2018||157 days|
|New York||Jan. 28, 2019||July 16, 2019||169 days|
|Tennessee||April 15, 2020||Nov. 1, 2020||200 days|
|Washington, DC||Aug. 30, 2019||May 28, 2020||272 days|
But the Arizona Department of Gaming continues to stick to its schedule, and it has penciled out exactly how it can get AZ sports betting off the ground by early September.
According to the ADG, once the initial application window closes Aug. 9, the department will begin an “Initial Qualification Evaluation Period.” After these five days, the ADG will announce which applicants qualify for licensing. If the department receives more applications than available licenses, it will spend up to eight days continuing to evaluate submissions.
By Aug. 28, operators can introduce their betting apps to the Arizona public, allowing customers to create their accounts. Sportsbooks can begin marketing, as well, and the first daily fantasy sports contests can start. If all goes to plan, sports betting will begin 12 days later.
“It’s more exciting than anything,” said Hartgraves. “Without a doubt, we definitely set a lofty goal of trying to go live on that date, the first Thursday of the NFL season. It’s gone really well, generally speaking. It’s kind of funny: It’s one of those things where, four or five months ago, you see this huge project up on the horizon, and it’s like, ‘That’s going to be a lot to do.’”
Regulators faced tall sports betting task
Five months. Five months to create a regulatory framework from scratch, develop tax rates and licensing fees, determine how many online skins each licensee can have, figure out how to allocate licenses to tribes, hear public feedback, finalize rules, open the application process, review submissions, test operating systems…
No way regulators in the Grand Canyon State could accomplish all that in such a truncated time frame.
So far, though, the Arizona Department of Gaming, tasked with piecing together and molding the state’s regulated sports betting market, has lived up to the challenge. The application window opened July 26, the same day regulations were finalized. Over the next few weeks, the ADG will review submissions, do the necessary background checks and due diligence, test operation systems and allocate licenses to qualified entities.
What once seemed like an improbable task — building a legal sports betting industry from absolute nothing in under five months — now seems more and more doable.
Emergency clause in AZ sports betting bill proved key
Certainly, pressure mounted on Arizona regulators. While residents, lawmakers and sports betting operators praised the law’s passage in April, the ADG needed to get to work.
The bill signed by Ducey, who also approved compacts with each individual tribe, included an emergency clause that took effect as soon as the compacts were approved by the federal government, which occurred in late May. The purpose of this clause was to create enough time for the ADG to draft rules and regulations for the newly legalized sports betting industry, with the hope of launching the first sportsbooks by early September.
Six days after the Ducey signing, the ADG released a “tentative rule drafting and operational timeline.” There was no start date announced, but the department noted it had already begun the rule-making process.
“Of course there was some pressure involved,” Hartgraves said about meeting that early September goal. “We’re setting up an industry that usually takes years to set up, not including this rule-making process to happen within five or six months when usually it takes one or two years, as well. It was definitely pressure there. But I think we were really confident the whole time. Having that experience in gaming already with our industry, it does transition well. We were definitely ready for it.”
Part of that confidence stemmed from the fact that the rule-making wouldn’t have to go through an arduous and sometimes lengthy evaluation and reviewal from the top brass. Generally, Hartgraves said, “there’s a huge process, and there’s generally requirements in how long public comments and certain things have to be. … But we didn’t have to do any of that.”
Rapid pace allows AZ regulators to finalize sports betting rules
Regulators moved swiftly. They released the first draft of sports betting rules June 15. They followed with virtual hearings and a written comment period. Then came another draft a few weeks later, followed again by more virtual meetings and written comments. Two more rounds of this followed.
“Obviously, we wanted to be as transparent as possible, and I think we did that,” Hartgraves said. “We had our virtual open comment sessions, we were very proactive in trying to get that stakeholder feedback. I think that was kind of the biggest thing, not having to go through that entire (required rule-making) process. And that really expedited everything for us.”
By July 26, the ADG nailed down sports betting rules and regulations and how it would allocate licenses. The department sent the rules to the Arizona Secretary of State and opened the application window. It appeared as a Sept. 9 launch of sports betting would be improbable in Arizona. But by opening that window July 26, regulators afforded themselves more than six weeks for application review, testing, background checks, everything needed to get the first sportsbooks off the ground.
“Obviously we are in a pretty quick licensing period from here on out to do that,” Hartgraves said. “But I think stakeholders across the board understood that this was going to be a quick process. We’ve tried to communicate with everybody throughout that this was going to happen. I think by and large it’s gone really smooth so far.”