Arizona Bill Would Legalize Tribal Sports Betting

A new Arizona Senate bill that would legalize tribal sports betting was introduced Wednesday, making Arizona the first state to consider legalizing tribal sports betting only. SB 1158 would amend current Arizona statutes to allow sports wagering at on-reservation casinos, as well as with kiosks at locations that have a bar, beer and wine, or private club license.

From the bill: “Each federally recognized Indian tribe that has a tribal-state gaming compact entered into pursuant to Chapter 6 of this title and that has tribal headquarters on Indian lands located in this state may operate sports betting as defined in Section 13-3301. No other person or entity may operate sports betting.”

The partisan bill has sponsors in both the Senate and the House, and was referred to the Senate Rules Committee on Wednesday. Senator Sonny Borelli (R-District 5) and Representatives Leo Biasiucci (R-District 5) and Mark Finchem (R-District 11) are the bill’s sponsors.

Arizona has 24 tribal casinos

Sixteen Arizona tribes run 24 Las Vegas-style casinos throughout the state, including about half a dozen around suburban Phoenix. The tribes have all entered into tribal-state compacts with the state in order to be able to allow gaming. The Department of Gaming, which already regulates and oversees gambling, would be the regulatory body.

The bill would prohibit “wagering on sporting events that is prohibited by the” NCAA, the tax rate would be set at 6.75 percent of adjusted gross receipts, and mobile sports betting is not addressed.

SB 1158 may be something of a workaround or a first step as Arizona considers whether or not legalize commercial sports betting in in the future. The state could not legalize sports betting at commercial locations without breaking the existing tribal-state compacts. Arizona Indian tribes currently pay the state a tax on gaming revenue, and legalizing sports betting at commercial venues would have put that revenue into jeopardy, as the tribes have the exclusive right to offer gaming in Arizona. According to a Bloomberg BNA report, if Arizona were to legalize sports betting at commercial locations, it could see “a reduction in how much revenue tribes owe the state and lifted limitations on some gaming devices and table games.”

A study by Wells Research Gaming projects that Arizona could garner between $486,000-$2.3 million in revenue from sports betting. That number is significantly lower than the $26.1 million that a 2017 Oxford study projects based on a 10 percent tax rate in a mature market. That study projects nearly $4 billion in handle resulting in $261 million in gaming revenue. At a 6.75 percent tax rate, Arizona would see about $17 million in tax revenue.

But with only tribal sports betting legal and no mobile or internet piece, Arizona likely wouldn’t hit the numbers projected by the Oxford study.

Arizona tribes wouldn’t be the first to offer sports betting

The last line of the bill states that SB 1158 is an “emergency” bill, and should it be passed, would become “operative immediately.”

Should Arizona legalize tribal sports betting, it would be the first state in the nation to do so, but not the first to have tribal sports betting. In Mississippi, the Choctaw Band of Indians became the first tribe to offer sports betting at its Pearl River resort last fall. The Mississippi Gaming Commission does not regulate tribal gaming. And in New Mexico, the Santa Ana Star Casino and Resort launched sports betting in October. The tribe did not ask for the state’s permission, and the thought in the state is that tribal sports betting is legal under the current tribal-state compact.

“Sports betting at the Santa Ana Star Casino is governed by the Pueblo of Santa Ana Gaming Regulatory Commission,” New Mexico Attorney General spokesman David Carl told Sports Handle at the time. “As such, we will closely monitor New Mexico’s tribal gaming compacts and work with the legislature for proper statutory and regulatory oversight to require responsible gaming and enhanced integrity to create an even playing field for all.”