Lawmakers Evaluate Arizona's Sports Gambling Measure

Feb 18, 2021

By Howard Fischer
Capitol Media Services
PHOENIX -- State lawmakers are starting to pick apart the gaming deal that Gov. Doug Ducey wants them to rubber stamp.

At a hearing this week, members of the Senate Commerce grilled Anni Foster, the governor's counsel, about the measure that would for the first time ever legalize the ability of Arizonans to bet on the outcome of sporting events as well as some of the individual things that could happen during a game.

The same measure also would authorize wagering on "fantasy sports'' leagues. And social organizations like veterans clubs could run multi-game-per-hour keno.

SB 1797 did clear the committee on a 6-3 vote. But even some of the lawmakers who agreed to advance the measure to the next step were less than pleased with what they are learning and suggested they might end up in opposition.

Among the issues:
- Giving sports teams, some of whose owners are Ducey political supporters, the exclusive right to take bets on sporting events and not allowing others to bid for that right;
- Opposition from the Arizona Board of Regents to one provision in the Ducey plan that would allow Arizonans to bet on the outcome of college sporting events;
- Demands from bar owners that they get at least a small piece of the action and be allowed, like social organizations, to also have keno games.

And then there's the secrecy by the governor on the details of a parallel deal he is cutting with tribes to expand their own casino operations.

That includes the fact that the pact will allow new tribal casinos in the Phoenix area, including at least one not on current reservation lands. The governor's office won't disclose the locations, saying that is covered by an agreement with the tribes to keep that information secret at least for the time being, including from residents of the affected communities.

But information obtained by Capitol Media Services shows the city of Glendale just signed an agreement with the Tohono O'odham Nation to scrap a prior deal to annex property the tribe already owns along Loop 303 at Northern Parkway. That would appear to pave the way for the tribe to build a new casino there as federal law precludes creating a new reservation -- a precondition for tribal gaming -- on land within a city limit.

Unless the questions are answered to the satisfaction of a majority of lawmakers, the whole deal blows up.
That's because the current gaming compacts give tribes veto power over any new form of off-reservation gaming. And they won't consent unless they get what they want, including new games and that new casino.

Conversely, if lawmakers don't ultimately approve what's in SB 1797 for expanded off-reservation gaming, the tribes won't get any right to expand what they do.
While the measure cleared the Senate Commerce Committee earlier this week, it still has a long way to go, including review by the Appropriations Committee and then the full Senate and House. And several of the legislators say they still have questions.

That most immediately goes to the fact that Ducey won't make public exactly what he has promised the tribes, including where new casinos might end up in the Phoenix area.
Sen. Tyler Pace, R-Mesa, said that's not acceptable. Pace said he and his colleagues want to see what Ducey has promised before deciding whether to approve the legislation.

While Pace opposes expanded gaming of any kind in Arizona, the hesitation from other lawmakers is less about the concept of gaming than the details of who gets what.
It starts with the legislation saying there will be up to 10 franchises entitled to take off-reservation wagers on sporting events.

More to the point, these are promised -- in law -- exclusively to operators of professional sports. That means the owners of baseball, basketball, football, hockey, golf, soccer and motorsports franchises.
No one else need apply.

That annoyed Sen. Michelle Ugenti-Rita, R-Scottsdale, who wanted to know why not open up that privilege to anyone else who might be willing to bid more for that right.

"Why not a restaurant that wants to take a stab at competing with a license?'' she asked, saying an owner then could contract with an experienced sports wagering firm. "I'm failing to understand the necessity of the sports team.''

And then there's the fact that the 10 teams will be taking bets on their own games.
"It reeks of a conflict of interest,'' said Ugenti-Rita. "It doesn't look good from my opinion.''
Pace was more pointed in his concern about the arrangement.

"So I'm playing the game but I'm also the house for the bet?'' he asked Foster.
"I would say that's sort of correct,'' she conceded. But Foster insisted that the teams have the experience as well as the financial wherewithal to set up and run what she claims is a low-margin business.

Pace remained unconvinced, saying he sees no reason why the state Department of Gaming, which already regulates tribal casinos and would have oversight of off-reservation gambling, could not screen other applicants.

The opposition from the Board of Regents presents a new wrinkle.

On one hand, the deal allows pretty wide open gaming on professional sports. That includes not just the outcome of a game or the point spread but specific elements, like how many strikeouts will a pitcher get.

There is no similar provision for what are called "prop'' bets on collegiate sports. But lobbyist Brittney Kaufmann told lawmakers even just plain wagering on outcome of games played by student athletes at the state's three universities is unacceptable

"This bill would add additional pressure of the citizens of Arizona wagering on their performance in competition,'' said. And Kaufmann said having wagering on college games could increase costs and liability on the schools.''

But so far her bid to excise the college wagering from the bill have been unsuccessful.
While the universities want less, the bar owners want more.

"Our establishments look for an opportunity to compete as well,'' said Don Isaacson who lobbies for bars and restaurants that have liquor licenses.

He pointed out that the only thing they have now is the ability to sell lottery "scratch'' tickets. And Isaacson warned that if they don't get keno now, that pretty much locks them out for the next two decades, the length of the deal Ducey is pushing.