Sports Betting Legalization Efforts Coming Together In Two New States

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Arizona sports betting

Recent sports betting bills are on file in at least 18 states, and that number may be poised to grow by two.

According to local reporting in Arizona and Minnesota, lawmakers in both statehouses have indicated an appetite for legislation. Neither state has produced a bill to date, but conversations are apparently well underway behind the scenes.

Time is running out on the 2018 legislative calendar, though, and tribal interests make these two cases particularly complicated.

Arizona sports betting?

Arizona has thriving (but separate) sports and gambling industries.

On the sports side, all four US professional leagues have franchises based in the Phoenix area. And when it comes to gambling, the state is home to more than 20 tribal casinos, two horse racing tracks, a lottery, and a network of OTBs. It also borders the Nevada sports betting market, the capital of the US industry.

Sen. Sonny Borelli told AZFamily that geography is part of the reason he plans to support legislation. “We’re sending all of our money to other states right now on sports betting,” he said. The money that’s escaping is badly needed, too.

Borelli wants to allocate funds to Arizona teachers, who have demanded a 20 percent pay increase. Meeting that demand alone could cost the state around $600 million per year in money that it doesn’t have. Although sports betting wouldn’t plug the entire leak, the associated tax revenue could certainly help.

Opposition exists, and the tribes…

Not everyone supports the idea, of course. Here’s Sen. Dave Farnsworth expressing his concern: “We have so many things eroding families in Arizona and the very moral character of our society that more gambling is the last thing we need.”

Despite his reservations, though, Farnsworth senses strong support within the legislature. He sets the odds “very high it might get passed” if federal prohibitions are relaxed.

Any expansion of gambling must be done with consideration to tribal agreements, though, which the report overlooks. And Arizona’s lawmaking calendar runs out in less than two weeks, so progress during this session is unlikely.

The state’s law doesn’t allow for daily fantasy sports, and tribes haven’t allowed legislation to change that to advance. So whatever happens in the state on sports betting is likely to need their approval.

Minnesota sports betting?

Minnesota is another state with both tribal and commercial gaming operations. Like Arizona, it has several Native American casinos, plus a pair of tracks that offer pari-mutuel horse betting.

Unlike Arizona, however, the tribes do not share casino revenue with Minnesota. There are no contractual restrictions that prevent the state from offering its own gambling products, though it would need to amend statutes.

According to a report from the Star Tribune, a behind-the-scenes effort to construct a Minnesota sports betting bill is already in progress. The outlet even acquired the early framework, which is based on research from House aides. An effort to regulate daily fantasy sports has also been rekindled recently.

Rep. Pat Garofalo is leading the charge on sports betting, and he offered his thoughts to Legal Sports Report this week.

Rep. Garofalo on MN sports betting

Garofalo cited “huge public demand” for sports betting in Minnesota, and he sees some danger in being unprepared for a Supreme Court ruling. “People are going to have an expectation that they’re going to be able to engage in safe, fair, and regulated sports gambling,” he said, presuming a striking down of PASPA.

If the states can’t provide a legitimate market, he fears bettors will continue to look elsewhere.

“We’re going to have a lot more people gambling on sports by the end of this year. It’s just a matter of whether they’re going to be doing it in a safe, regulated environment in Minnesota or whether they’ll be using offshore sportsbooks.”

Garofalo stressed a need to tread carefully when it comes to the stakeholders (like the tribes) in his state, though. “I won’t submit a sports gambling bill the tribal casinos are opposed to,” he said. “Nonnegotiable.”

Garnering tribal support is far from a sure thing, however. Leaders have stood opposed to gambling expansion in the past, concerned that a renegotiated compact would include payments to the state.

Garofalo also indicated that he’s been in touch with two professional sports leagues — likely the NBA and MLB, which have been lobbying for adoption of their model legislation. “They’re obviously very engaged in the process and want to partake in it,” he said.

Minnesota has a bit more time to move than Arizona, but the spring calendar is still running thin. Lawmakers conclude their session on May 21.