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Arizona Regulator Doubles Number Of Mobile Sites Allowed In Latest Draft Rules

As regulator moves forward, Bally's and WynnBET announce market access

Jill R. Dorson by Jill R. Dorson
July 2, 2021
in Industry, Regulation
Arizona-Flag-Painting

(Shutterstock)

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The number of potential mobile sports betting participants in Arizona appears to have just doubled.

On Friday morning, the Arizona Department of Gaming released its second version of draft sports betting rules and announced a second virtual stakeholder input session on July 7. The latest rules appear to allow for each event wagering operator to have up to two skins or digital platforms, as long as they are on the same hardware system. That is a major departure from the first set of draft rules and goes against what most commercial operators were advocating for.

The proposed rules offer the following definitions (Section 19-4-119(9, 10):

“Event Wagering Platform” means the internet interface to a single event wagering system, which is designed to accept mobile event wagers through a website or a mobile application.

“Event Wagering System” means the hardware, software, firmware, communications technology or other equipment to allow patrons to place event wagers, regardless of whether event wagers are offered at retail,
to include kiosks, and/or over the internet on an event wagering platform.

Later in the proposed rules, in Section 19-4-119(B, C), it reads: “(B)Each event wagering operator may only have one (1) event wagering system … (C)Responsible parties may use more than one (1), and up to two (2), event wagering platforms. Responsible parties shall submit a written request to the Department prior to offering a second event wagering platform.”

The draft goes on to set guidelines around allowing for a second platform.

The new Arizona sports betting law allows for a maximum of 20 event wagering operator licenses, each of which includes at least one brick-and-mortar location and now up to two digital platforms. There are 10 licenses, each earmarked for professional sports franchises/venues and tribal casinos.

With the new language, companies like Caesars or FanDuel may be able to have two mobile sites or apps. Caesars has multiple brands, including Harrah’s and William Hill, while FanDuel parent Flutter Entertainment also owns the FOX Bet brand. Another option could be that companies which share a back-end provider, such as Kambi or IGT, could potentially have two platforms.

Taxes, fees set

The newest draft rules also set the tax rate at 8% for retail wagering and 10% for digital wagering, set the application fees, and address a number of other concerns brought by stakeholders in June.

The ADG set the initial licensing fee for event wagering operators at $750,000. Potential licensees will also have to pay a $100,000 application fee and a $150,000 annual renewal fee. The same menu of fees would apply to an operator’s designee — meaning, for example, that if the Phoenix Suns designate partner FanDuel as its sports betting operator, FanDuel would pay the fees. The fees step down significantly for limited operator licenses — retail-only at horse racetracks and OTBs — to $25,000 for the initial license, $5,000 for the application fee, and $5,000 for an annual renewal.

Among the other changes:

  • Credit cards can now be used to fund accounts.
  • The onus is now on sports governing bodies to request that operators use official league data, rather than asking operators to take the lead. In nearly every other state that requires the use of official league, sports governing bodies must request that it be used.
  • Language in the definitions section and throughout the rules was cleaned up.
  • Some of the issues around branding and financial reserves were clarified.

One issue not addressed is how the ADG will determine which 10 of Arizona’s 15 gaming tribes will be awarded event wagering operator licenses. Under the new law, there are 20 such licenses available, with 10 designated to go to professional sports franchises/venues and 10 to tribes. The ADG asked for feedback from stakeholders on this issue during a first round of stakeholder and public comment, but got little.

The ADG is aiming to launch sports betting operators on Sept. 9, the first day of the NFL season. The primary goal, however, is to have final rules approved by mid-July.

WynnBET, Bally’s latest to secure access

As the ADG moves forward, operators are, too. Friday morning, WynnBET announced that it will partner with the San Carlos Apache Tribe for sports wagering, and earlier in the week, Bally’s released news of a deal with the WNBA’s Phoenix Mercury for market access.

KINDRED GOES WEST TOWARDS CALIFORNIA AND ARIZONA

KINDRED GROUP CONTINUES ITS EXPANSION IN US MARKET BY PARTNERING UP WITH QUECHAN TRIBE OF FORT YUMA INDIAN RESERVATION

— Axel Karlsson (@NordnetAxel) February 9, 2021

So far, six operators have a way in — Bally’s (Mercury), Caesars (Diamondbacks and Ak-Chin Indian Community), DraftKings (PGA), FanDuel (Suns), Kindred (Quechan Tribe), and WynnBET (San Carlos Apache) — and two more are expected to announce deals. Penn National Gaming (Barstool Sportsbook) has a partnership with NASCAR and will likely make a deal to be Phoenix Raceway’s event operating partner, and it’s been widely anticipated that BetMGM will partner with with the Gila River Indian Community, which owns three suburban Phoenix casinos.

As of now, there stand to be three retail sportsbooks in downtown Phoenix, not including one each at Phoenix Suns Arena and Chase Field. The sports franchises or their operators are entitled to a second brick-and-mortar location in the downtown area, outside of the arenas. Expect Bally’s, Caesars, and FanDuel to take advantage.

Among professional sports franchises, that leaves the NFL Cardinals and NHL Coyotes yet to partner. There are not 10 professional sports franchises/venues currently in Arizona, so not all of the 10 designated licenses will be claimed.

Landmark deal for Bally’s, Phoenix Mercury

When Bally’s announced this week that it will partner with the Phoenix Mercury for sports betting market access in the Arizona, history was made. The Mercury are the first professional women’s sports team in the U.S. to make a deal with a sports betting company.  

WNBA getting in on the sports betting rush. Arizona just passed legislation, so expect a lot of marketing/promotional activity ahead of its introduction later this year.

https://t.co/GVUyJ9d82l

— Tavish ZM (@TZM_TMT) June 30, 2021

Presumably, Bally’s won’t have an in-arena sportsbook — after all, FanDuel partnered with the Suns in 2020 and is already building out its sportsbook at Phoenix Suns Arena.  According to a press release, Bally’s will operate a digital platform and a brick-and-mortar sportsbook “within the vicinity” of Phoenix Suns Arena. The deal is for 15 years, and both entities touted the partnership as reflecting their “shared values and commitment to investing in diversity, equity, and inclusion.” 

WynnBET’s deal with the San Carlos Apache Tribe could be considered a bit of a surprise — like Penn National, it has a sports betting agreement with NASCAR. WynnBET gained market access in Virginia through the deal, but by partnering with a tribe in Arizona, it appears to clear the way for PNG.

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Jill R. Dorson

Jill R. Dorson

Jill has covered everything from steeplechase to the NFL and then some during a more than 30-year career in sports journalism. The highlight of her career was covering Oakland Raiders during the Charles Woodson/Jon Gruden era, including the infamous “Snow Bowl” and the Raiders’ 2003 trip to Super Bowl XXXVII. Her specialty these days is covering sports betting legislation across the country. You can reach Jill at jill@bettercollective.com

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