Draft Sports Betting Regulations Silent On License Fees, Tax Rate

Posted By Derek Helling on June 16, 2021

It might have come a day late, but the first Arizona sports betting draft regulations are now live for public comment. At this point, they are still lacking several figures that will be important to future AZ sportsbook operators.

Among those are the cost of licenses and renewals along with the tax rate for monthly revenue. The AZ Dept. of Gaming could decide those numbers within the coming weeks to stay on track for its goal.

Arizona sports betting draft regulations now live

On Tuesday night, the AZ Dept. of Gaming announced the draft’s posting. The 13-page document contains specific terms on several aspects of the coming launch of sports betting apps in AZ.

Among those are protocols regarding permissible events and official league data. On both of those matters, the regulations would put the onus on the licensees instead of regulators.

Each licensee would need to submit a comprehensive list of events it plans to offer action on for approval. Additions to it would follow a similar protocol.

In a similar way, operators would have to request the leeway to use “non-official data.” The rules make no distinction between in-game and pre-event wagering on this matter.

For example, if Caesars Sportsbook wanted to use data from a vendor other than Sportradar to settle bets on a Phoenix Suns game, it would have to get permission from the Dept. to do so. Sportradar is the NBA’s exclusive official data provider.

Companies like Sportradar will have to apply for supplier licenses. Those cost $5,000 to acquire and $1,000 to renew each year. However, license fees for the operators they supply are yet to be determined.

Important matters still TBD

This draft doesn’t contain license application fees or renewal fees for event wagering operators or management services providers. It does specify, however, that renewal terms are every five years for event wagering licenses.

Management services provider licenses will be appropriate for gambling companies that run sports betting operations on licensees’ behalf. A good example of this will be DraftKings Sportsbook at TPC Scottsdale.

Based on the current language in the regulations, it seems TPC Scottsdale would apply for an event wagering operator license and then DraftKings will seek a management services provider license.

Both parties will be highly interested in another missing figure. A section for fees requires licensed operators to submit their adjusted gross revenue “no later than the 25th of each month for the previous month.”

However, that section simply says the “established fee for the privilege of operating event wagering shall be [TBD] of adjusted gross event wagering receipts.”

That rate and possible licensing fees might be the subject of many comments over the next week. The clock on the time for interested parties to get their two cents in is now running.

Will Dept. of Gaming stick to timeline?

Earlier this year, the Dept. of Gaming said this draft would be available no later than June 14. Although it was just a day late, the Dept. still missed that deadline.

The next checkpoint is June 21, when the comment period is supposed to close. Given the fact that the draft wasn’t available on time, the Dept. might extend that period appropriately.

Stakeholders shouldn’t assume the Dept. will grant an extension, however. Weighing in on the entirety of the draft could still end on June 21.

When the next update to this document appears, it will probably feature a firm fee schedule and tax rate. For now, the very companies that will eventually pay those amounts have an opportunity to influence them.

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