An Arizona sports betting bill has cleared one of the two chambers of the state legislature.
As newsworthy as that statement is in and of itself, whether it stands a chance to actually become law is of utmost importance.
On Thursday, the full Arizona House advanced HB 2772, which would regulate not only sports betting but also daily fantasy sports. The Senate has recently taken some action on gambling expansion of its own. That complicates the situation for the House bill.
Details of the House-approved Arizona sports betting bill
HB 2772 expands gambling in Arizona to make 20 sportsbook licenses available. Tribal casino operators would have an exclusive path to 10 of those. The remaining licenses would become available for professional sports leagues and teams.
However, that would be dependent on renegotiating gaming compacts between the state and tribal groups. In exchange for conceding exclusivity on sports betting, the tribes would get to expand their gaming offerings further. Their menus could include games of pure chance like baccarat, craps, and roulette.
The bill bans proposition wagers on college sports but allows them for all other events. Provided the bill becomes law in its current form, in-state teams like the Arizona Cardinals and Phoenix Suns could offer sports betting to fans.
AZ sports betting revenue sharing yet to be set
The bill also does not set a firm percentage of revenue sharing between tribal casinos/other license holders and the state. Instead, it directs the Arizona Department of Gaming (ADG) to set thresholds for that. The ADG would also decide on other regulatory issues, like how much to charge professional sports leagues/teams for a license.
In the current structure, both local and state governments get annual payments from tribal casinos relative to their revenues. For example, the state got $102 million in revenue sharing for the fiscal year that ended in June 2020.
Support for the bill on the House floor was substantial after attaching an amendment that revised the way the ADG structures fees for both DFS and sportsbook licensees, among other things. The vote was 48-12 in approval.
Those headwinds may not push this bill much further, however. A bill that recently cleared committees in the upper chamber of the Arizona legislature has one major issue.
So, what happens now?
There are now three likely destinations for HB 2772. One is the desk of Gov. Doug Ducey, another is back in front of House members with significant revisions, and the other is the proverbial “boulevard of broken dreams.”
Late in February, SB 1794 passed through two Senate committees. That bill centers gambling expansion in the state on historic horse racing (HHR) machines. It also authorizes sports betting in a manner very similar to HB 2772, as it was recently combined with SB 1794. The Senate bill was essentially a companion to HB 2772.
The big roadblock to getting SB 1794 across the finish line is tribal support, and by extension, support from Ducey. The governor has already been working on negotiations for new compacts with casino operators, as the current deals expire next year.
Tribal casinos will likely oppose SB 1794 because of the HHR inclusion. The bill would allow off-track betting sites (OTBs) in the state to offer that type of gaming to customers. Those machines look very similar to slot machines, which would threaten the current exclusivity in that vertical that tribal casinos enjoy in Arizona.
What would that mean for HB 2772? It isn’t clear if the Senate will pass it as is, which only grants keno games rather than HHR gaming to OTBs. At the same time, amending the bill to authorize HHR gaming at OTBs might throw a wrench in the entire works. Nothing will happen without the approval of tribes.
