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Arizona Sports Betting Becomes Legal In Landmark Bill For Tribal Casinos

Governor Doug Ducey signed Arizona sports betting legislation and an updated tribal compact Thursday.

Ducey’s signature was expected on HB 2772, which helps enact the broader 20-year extension to the tribal gaming compacts he negotiated. Along with AZ sports betting, the legislation also legalizes daily fantasy sports and Keno games.

During the signing ceremony, Ducey said the compact and its accompanying gaming legislation a “historic bipartisan achievement:”

“This represents the most significant changes in almost two decades, a truly historic event. This compact amendment and associated legislation continues and builds on the success that the tribal-state partnership has provided for decades. We can call this a win-win-win for the tribes, the state and the taxpayers.”

Now, the Arizona Department of Gaming needs to set the details of AZ sports betting regulations, including the tax rate. State legislators hope operators can launch by September 1.

Sports betting operators pushing into Arizona already

DraftKings was the first to secure market access this week, signing a partnership with TPC Scottsdale.

After the ceremony wrapped, the Phoenix Suns announced a partnership with FanDuel. It will include a sportsbook at the Phoenix Suns Arena.

Following the Senate’s passage of HB 2772, both DraftKings and FanDuel tweeted out their support of the legislation. During theScore’s second-quarter earnings call April 13, CEO John Levy mentioned Arizona’s legalization as a point to be excited about.

Licenses available in Arizona

There are 20 sports betting licenses available in Arizona, allowing for retail and online sportsbook operation.

The state’s gaming tribes receive 10 of the licenses. Tribes with multiple locations can operate multiple sportsbooks under one license. The other 10 are for sports organizations.

Not all 10 sports licenses are spoken for, leaving room for potential future teams in Arizona. MLS Commissioner Don Garber mentioned Phoenix as a potential expansion city this week.

The Arizona Cardinals, Arizona Diamondbacks, Phoenix Coyotes, Phoenix Raceway and PGA Tour all spoke on behalf of the legislation during hearings.

Hairy journey to passage

Ducey asked Sen. T.J. Shope and Rep. Jeff Weninger to sponsor the sports betting legislation, resulting in HB 2772 and SB 1797.

The House passed its bill with relative ease on March 4. The Senate’s journey was not as smooth. Its bill became stuck in a committee attached to a controversial historic horse racing bill.

Legislatures broke the dam April 8 and the legislation made its way quickly through the Senate, passing with an emergency designation, 24-6, on April 12.

“You’re always happy when the thing gets done,” Shope told LSR this week. “But this was a different animal. You start looking at the pantheon of legislation you work on and the longevity of it. This will far outlive my service to the state.”

What Arizona sports betting means for the state

A legislative fiscal note suggests sports betting operators could generate an estimated $154.4 million in a mature Arizona market.

With a minimum tax rate of 8%, that would generate approximately $12.3 million in taxes for the state. The fiscal note projected the bill as a whole will generate $34.2 million to the state’s general fund by 2024.

Arizona is a top-15 state in population. It has roughly 500,000 more people than Tennessee, which has generated $61.9 million in sports betting revenue during its first four months of sports betting.

With all of the big four major sports leagues represented and a growing major metro area, it could be a vibrant market for sports betting in Arizona.

That vibrancy could be on full display in 2023, when the Cardinals’ State Farm Stadium hosts Super Bowl LVII .

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