Another Wrinkle Emerges in Arizona Sports Betting Journey

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Arizona sports betting

The path to Arizona sports betting took another strange twist this week.

During a Senate Appropriations Committee hearing, SB 1797 was held over That bill is a companion to HB 2772, which is still alive and legalizes AZ sports betting as part of a broader new gaming agreement with the state’s Native American tribes.

The committee then took up discussing a bill to allow historic horse racing. Senate Bill 1794 was then amended to essentially include the sports betting bill.

That adds several new wrinkles to the potential legalization of sports betting in Arizona.

A ‘poison pill’ for Arizona sports betting?

The amendment to the historic horse racing bill would allow retail and online sports betting in Arizona.

Proponents of the horse racing bill suggest it is another way to add a new stream of revenue. They suggest it is a version of pari-mutuel racing, which was legal before a 2002 gaming compact with the tribes.

Opponents say the practice is essentially slot machines and would violate the 2002 gaming agreement with tribes.

“Wagering on historic racing through the use of player terminals has been prohibited in Arizona since before May 1, 2002,” Arizona Attorney General Mark Brnovich wrote in 2018. “Any change to Arizona’s pre-May 1, 2002 gaming laws could cause one of the signatories to the Arizona Tribal-State Gaming Compact (the “Compact”)[1] to initiate action under Compact section 3(h)(1), which would limit the State’s ability to regulate some aspects of tribal gaming and dramatically decrease the revenues the tribes must provide to the State.”

Despite the inclusion of AZ sports betting, little of the discussion on the bill touched on it.

A split vote

The horse racing bill passed through the committee, 5-4. What happens next is anyone’s guess and adds a layer of complexity to the Senate journey for sports betting.

Last week, the sports betting bill passed out of the Senate Commerce Committee, 6-3. Despite tribes speaking on behalf of the bill, senators questioned how it might affect the Arizona gaming landscape and its true potential impact on the state’s bottom line.

Part of the problem could be that little has been revealed about the new tribal compact that was recently negotiated between the tribes and Gov. Doug Ducey. Tying sports betting to the ‘poison pill’ could be a way to slow down sports betting or play political games with the governor.

House sports betting bill still alive

The House bill legalizing sports betting is still alive. It hasn’t met the same opposition and political pinball as the Senate companion. If it passes a full House vote and moves on to the Senate, that could be the bill that wins out.

Both bills allow for 10 licenses tied to professional sports organizations in the states and 10 to tribes for both retail and online wagering.

If the Senate bill makes it through cleanly, it appears it would have similar support in the House.

Proponents of sports betting in the state estimate the state could generate $42 million in taxes annually from the practice.