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New sports betting law means increased revenue for state, tribes

Gov. Doug Ducey signed a HB2772 (fantasy sports betting, event wagering) into law on April 15, effectively making Arizona the 26th state to legalize sports betting. Multiple bills aimed at legalizing sports betting have failed in recent years, but this session has brought a success that will increase revenue for both the state and tribes.  

Sports betting’s popularity has grown exponentially through the 2010s and now represents a $20 billion industry nationwide. State legislative analysts and industry experts predict that sports betting has the potential to generate over $427 million in revenue across the state. Although a highly speculative figure, this revenue would be taxed at a minimum rate of 8% as set by the Arizona Department of Gaming and could increase the state General Fund by $34.2 million annually. 

Alexis Glascock

Alexis Glascock

Ducey’s decision to sign the bill into law is linked to a larger agreement between the state and tribal leaders to expand privileges to tribes under the Tribal Gaming Compact. Tribes will be allowed to open four new casinos in the Phoenix metro area, as well as operate an increased number of slot machines. While such measures far exceed the current demand for gambling or capabilities of tribes, the agreement was designed to allow room for growth in the coming years. 

The new law allows for both in-person and virtual sports bets to be placed by all Arizonans over the age of 21 years old. Up to twenty licenses will be issued across the state; 10 will go to tribal casinos and 10 will go to sports venues. Among the professional sports teams and sites that will be granted privileges include the Arizona Cardinals, Phoenix Suns, Phoenix Coyotes, Arizona Diamondbacks, Phoenix Raceway, TPC Scottsdale, and Phoenix Rising. Individuals can also bet on their favorite college sports teams, including the Arizona State Sun Devils and Arizona Wildcats, while betting on individual players is not permitted. 

Virtual sports betting giants DraftKings and FanDuel have partnered with TPC Scottsdale and the Phoenix Suns, respectively, to obtain licenses to operate in the state. Additionally, most venues will launch their own mobile betting service to reach a wider range of fans. Teams and venues that offer sports betting will be required to geofence those who choose to bet a specified area and one satellite location. Technology from other states that support online sports betting will be used to restrict bets to the designated areas. 

The Arizona Department of Gaming will serve as the regulatory body overseeing the implementation and management of the sports betting in the coming months. The department’s goal is to have fully operational offerings by the start of the football season in September of 2021. 

Alexis J. Glascock, an attorney with Fennemore, specializes in government relations and regulations. 

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