Arizona Sports Betting Could Become Legalized This Week

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Arizona is finally set to take up a vote on sports betting today, with a realistic chance to legalize statewide mobile sports betting. The dramatic turn of events comes after Arizona sports betting remained stalled in the Senate for more than a month. Today, Senators are expected to hold an up or down vote on bills legalizing daily fantasy sports and sports betting in Arizona. If all goes well, the approved text could find itself at the governor’s desk early this week.

Optimism makes Sen. T.J. Shope expect two-thirds support for HB 2772 or his SB 1797, which was withdrawn Thursday from the Senate Appropriations Committee. According to Shope, “it would allow the Governor to sign immediately, maybe as soon as Tuesday.” An approval will be required from the Bureau of Indian Affairs, but Shope said it would be a formality.

What Else Did Shope Say?

In his Thursday tweet, Shope thanked former Arizona Coyotes for helping him move forward sports betting bills to an up-or-down vote. Later, the lawmaker spoke to news media that the full Arizona Senate would vote on the bill on April 12, claiming confidently that yes vote would win the day. The legislation would allow up to 20 online sports betting licenses, besides legalizing daily fantasy sports and electronic keno.

The House already approved Rep. Jeff Weninger’s HB 2772 online sports betting bill with a 48-12 vote last month. Shope, who sponsored a companion bill in the upper chamber, believes the House bill will also get through the Senate floor with a dominant majority.

Jeff Weninger, who co-sponsored SB 1797, has also included emergency regulations with the Arizona sports betting bill in order to speed up the launch process. It needs two-thirds majority support, which the House gave last month. Now, it requires 20 of the upper chamber’s 30 members to approve under the emergency proposal. Weninger said even a simple majority could legalize Arizona sports betting, but it would delay the launch of the industry.

Why The Delay?

Despite support from all major stakeholders – including the governor, Arizona’s gaming tribes, major pro sports teams, and leading sportsbooks – the House bill remained idle in the Senate for more than a month, thanks to Sen. Dave Gowan.

Gowan, who chairs Senate Appropriation Committee, threatened the possibility of sports betting in Arizona by inserting historic horse racing (HHR) bill into the original sports betting legislation. The state’s tribes say the HHR terminals, which allow bets on previously conducted races and functions, would violate their exclusive rights to such offerings and thus are against the gaming compact. Sports betting operators said they would support a bill that doesn’t jeopardize tribal interests. The Senate’s online sports betting bill with HHR addition narrowly passed out of Gowan’s committee in March but hasn’t received a floor vote.

Senate President Karen Fann and other supporters reportedly worked tirelessly to bring the industry’s preferred bill, the one without HHR attached, to the full Senate vote. Republicans, who hold narrow majorities in the Arizona House and Senate, needed Democratic support to get through the standalone bill backed by Gov. Ducey and Fann against the controversial measure that attached HHR with it. Democratic leaders, who had a few concerns, including tribes’ role in sports betting negotiations, have recently indicated their support.

Projections for the Industry

Proponents of the Arizona sports betting industry claim to have an estimated $42 million in annual taxes for an industry whose annual market size is $3 billion handle according to Compass Strategies managing partner Kelsey Lundy. Arizona would charge an 8% tax on fantasy sports revenue and a minimum of 8% on sports betting. The legislative fiscal note includes a projected $154.4 million in taxable operator revenue when the Arizona sports betting market matures. It would result in $12.3 million in taxes, with the annual fee revenue expected to be $4.1 million.

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