When Native American tribes in agreed to limit themselves to 10 mobile sports betting licenses, they may have underestimated the commercial interest in Arizona sports betting.
Attorney Stephen Hart, who took part in the negotiations with the governor’s office representing the Navajo Nation Gaming Enterprise, said they never expected for more than 10 tribes to want to participate in sports betting.
“We were trying to count the number of entities that wanted to do sports betting in Arizona, and we thought that 10 would cover the waterfront,” Hart said. “Well, you know, it didn’t work out that way.”
It turned out that 16 tribes found partners and applied for mobile event wagering licenses. The Arizona Department of Gaming had the unenviable task of choosing which 10 tribes got licenses. Navajo was among the chosen.
Hart, a former director of the Arizona Department of Gaming, explained:
“I was surprised how strong the demand was. And the demand really didn’t come so much from the tribes to go from 10 to 16. It came from companies from Europe and other places saying we would like to participate in this, so you tribe should file an application and we’ll pay the fees.”
Hart spoke more about the tribal compact negotiations at the Global Gaming Expo in Las Vegas and in a one-on-one conversation with PlayAZ.
Arizona tribal gaming compact negotiation process
Hart explained that nine Arizona tribes began collectively renegotiating their compacts with the office of Gov. Doug Ducey in 2016.
The majority of the compact was in place in mid-2018 when the US Supreme Court overturned PASPA. Suddenly, sports betting became part of the discussions.
Hart called PASPA’s demise a big shift in the focus of negotiations with the governor’s office.
“The governor’s office decided that they were in love with sports betting. The compact was a deal that just got better for the tribes when they put sports betting into it. But the real drive for the governor’s office was the sports betting and not much else.”
That set up new hurdles. Tribal negotiators had thought they would be done with the compact by 2019. But it turned out they didn’t reach an agreement until April 2021. By the time the negotiations finished, they involved 21 of the 22 Arizona tribes.
Gov. Ducey wanted Arizona sports betting more than tribes
The major hurdle presented by sports betting was that the governor didn’t want the tribes to participate.
“When it started, the governor’s office did not want tribes involved in sports betting at all,” Hart said, “and it was a bit of a miracle that we managed to get through that.”
Hart said he tried to push for 12 tribal event wagering licenses, the same figure afforded tribes in Michigan.
Eventually, they settled on 10 mobile sports betting licenses for tribes and 10 for sports teams. That seemed to them like more licenses than operators who would want to partner with them, anyway. All tribes may offer retail sports wagering under IGRA.
“I could get the state to 10 and couldn’t get them any higher,” Hart said. “I negotiated that for a year, back and forth and back and forth.”
Most tribes are happy with the results
While it’s not a good look for some tribes to be refused Arizona mobile sports betting licenses, most tribes see the compacts as an overall huge net positive. Even ones that didn’t get mobile wagering licenses.
They were happy with the compact before sports wagering became involved. With sports betting as part of it, tribes got some added concessions they felt were worth more than sports wagering.
More important aspects of the compact to tribes than sports betting include:
- Expands scope of gaming: In addition to sports betting, tribal casinos may add new games such as baccarat, craps, roulette and pai gow. They also increase their number of slot machines. This all allows them to better compete with casinos across the border in Nevada.
- Compact duration: By extending the compact by 25 to 27 years, tribes gain leverage with the banks to refinance loans and finance new projects.
- New facilities: The compacts allow Arizona tribes to build an additional 10 casinos, four now and six in the coming years. The Navajo gets one of those new casinos.
“We were looking at this and looking what the governor’s office wanted, and it was pennies in comparison,” Hart said. “Sports betting is very interesting … but how much money do you make? You really don’t. It’s more like being a grocery store and less like being a casino.”
Not all tribes have accepted allowing commercial entities to join in on gaming in Arizona. The Yavapai-Prescott Indian Tribe was denied in an attempt to stop the sports betting launch.
“The compact in Arizona now is a tremendous compact for the tribes,” Hart said. “The price that they paid for that tremendous compact is the 50-50 split in how they’re going to do sports betting.”
