Arizona Sports Betting Bill Heads to Governor After Clearing Senate Hurdle

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Arizona sports betting

Legal sports betting is a step away in Arizona.

The Arizona Senate passed HB 2772, an identical bill to SB 1797, by a 23-6 vote. The bill has an emergency clause, which required the two-thirds vote to enact.

Now, the AZ sports betting legislation now heads to Gov. Doug Ducey‘s desk next. Ducey likely will sign the bill, as it helps enact a new tribal gaming compact. The bill legalizes sports betting, daily fantasy sports, and Keno and mobile draw.

Senate bill sponsor Sen. T.J. Shope predicted the quick action last week. A logjam in a Senate committee and a “poison pill” historical horse racing item held up sports betting legislation, but it was freed last week. HB 2772, was approved by the House March 4.

“It would allow the Governor to sign immediately, maybe as soon as Tuesday,” Shope told LSR Thursday. “They would need to get approval from Bureau of Indian Affairs, but that’s almost a formality.”

The emergency act was implemented in hopes of getting wagering off the ground by NFL betting season.

How Arizona sports betting got here

New compacts between Arizona and its gaming tribes have been in the works for several years. The current compacts expire in 2022.

Sports betting is a key component of the new compacts to help modernize gaming and generate new revenue streams. The Senate Fiscal Note projects the bill will generate $34.2 million in annual general fund revenue by 2024.

Ducey even mentioned AZ sports betting legalization during his State of the State address earlier this year.

Ducey’s General Counsel Anni Foster noted in committee testimony that the sports betting bills were the culmination of the work to extend the compacts.

Two different journeys

HB 2772 cruised through the House. The House bill passed the House Commerce Committee, 9-1, and cleared the full House, 48-12.

Sports betting found different feelings in the Senate. SB 1797 passed the Senate Commerce Committee, 6-3, before it was merged with a historic horse racing bill that squeezed out of the Senate Appropriations Committee, 5-4.

Questions surrounding the HHR bill left both sports betting bills untouched by the full Senate for more than a month. The HHR bill was stripped from the sports betting bill last week.

During third reading, the House bill was substituted for the Senate bill to send it to the governor.

What sports betting in Arizona could look like

The bill proposes 20 licenses. Ten of those will go to tribal operators and the other 10 go to Arizona’s professional sports teams.

During the legislative process, representatives from the Arizona Cardinals, Arizona Diamondbacks, Phoenix Coyotes, Phoenix Raceway and PGA Tour all spoke on behalf of the legislation.

The licenses include retail and mobile operations. A tribe with multiple gaming locations could operate retail sportsbooks at each under one license.

Tribal leaders also testified on behalf of the bill during committee hearings.

It also legalizes daily fantasy sports in the state, one of a few states left where it is not currently legal.

What operators are likely to come to Arizona?

Lobbiest Kelsey Lundy testified on behalf of BetMGM, DraftKings and FanDuel during hearings. Along with those three, most major operators are likely market entrants with 20 licensed partners available.

Phoenix is a major sports market with teams in all four major sports leagues and a growing population.

The legislative fiscal note projects $154.4 million in annual taxable sports betting revenue once the market matures. The fiscal note uses an 8% minimum tax to project the state’s potential revenue. State gaming regulators will finalize the rate, license fees and other details at a later date.