20 licenses between tribes, pro teams

Ten Arizona State Representatives, led by Rep. Jeff Weninger (R – Chandler), have introduced a bill that would greatly expand legal gambling options in the state, most notably permitting sports betting. The goal of HB 2772, introduced in the Arizona House on Monday, is to not only generate more tax revenue for the state, but to keep gambling dollars within Arizona’s borders.

The biggest key to gambling expansion is arguably how the state negotiates with Native American tribes, who, by the terms of a 2002 gaming compact, have the rights to most forms gambling in Arizona. A 2019 bill would have given the rights to sports betting completely to the tribes.

HB 2772 does things a little differently, making 20 sports betting licenses available. Ten would go to the tribes to open sportsbooks at their casinos, while the other ten would be earmarked for the state’s professional sports teams and other sports organizations like NASCAR.

Prop bets are allowed on pro contests.

The bill permits wagering on both professional and college sports, but for college games, the only bets allowed are on the actual game outcomes. Prop bets are allowed on pro contests. Online betting and daily fantasy sports are also included in the bill.

Tribal gaming would get to expand

As mentioned, the tribes are key to the deal. Their 20-year compacts with the state expire next year, but Governor Doug Ducey expressed his desire to renegotiate the compacts to include sports betting. In his recent State of the State address, Ducey called for a “modernized gaming compact that will bring in more revenue for our tribal nations and our state budget.”

deal would allow them to add such games as roulette, craps, and baccarat

In exchange for sharing the sports betting market with other operators, the tribes would get to expand their own casino gaming offerings. Casinos host many games like slots, poker, blackjack, and a host of other table games, but they are not permitted to have table games that are considered 100% based on chance. The new tribal deal would allow them to add such games as roulette, craps, and baccarat.

Naturally, the state government gets a percentage of the tribal casinos’ net gaming revenue. Last quarter, that amounted to $31.7m. In the fiscal year ending June 30, 2020, tribal casinos generated almost $2bn in revenue, sharing $102m with the state and $13m with local municipalities.

State needs more revenue streams

With Las Vegas so close by – especially for Arizonans in the northern and western parts of the state – the need to give people a reason to keep their entertainment dollars home is particularly important.

“Obviously, the allure of Vegas is always going to be there,” Rep T.J. Shope (R – Coolidge) told Capitol Media Service. “I, myself, go a handful of times a year.”

He added that expanded gambling, and sports betting, in particular, would also keep visitors spending their money in Arizona, rather than straying to other states.

Gretchen Conger, Governor Ducey’s deputy chief of staff, told the Associated Press that not only would sports betting benefit the state’s coffers, but it would also be a needed boost to the tribes and sports teams who saw the well go dry during extended pandemic lockdowns in 2020.

Conger did not have an projected revenue estimate, saying: “It really depends on what the uptake is on the event wagering.”