On the same day the Arizona Department of Gaming announced it had approved 18 event wagering operator applicants, it took away a tribal license it had issued earlier in the week. The move effectively shuts out Australian-based PointsBet from the biggest Western market to legalize sports betting since the fall of the Professional and Amateur Sports Protection Act in 2018.
According to a Monday press release, Yavapai-Apache Nation representatives are still scratching their heads as to why Cliff Castle Casino was awarded a license only to have it rescinded.
Arizona’s new sports betting law caps the number of available event wagering operator licenses at 20 — 10 each for tribes and professional sports teams/franchises. The ADG on Friday announced that it had allocated 18 of 20 available event wagering operator licenses, which allow the holders to offer retail and statewide mobile sports betting.
PointsBet, one of the biggest sports betting operators in the U.S., is live in Colorado, Indiana, Illinois, Iowa, Michigan, and New Jersey. The company had little to say on the situation.
Tribe: Process not transparent
According to a Cliff Castle press release, on Aug. 23, the tribe was allocated “State Certification PCA #EW 2168,” which authorized it to offer “service in accordance with the Arizona Revised Statutes for Event Wagering and Fantasy Sports.” The effective date on the license is Aug. 23, 2021, and it has an Aug. 31, 2026 expiration date.
The ADG does not dispute that it mistakenly awarded the license. In an e-mail to Sports Handle, an ADG spokesperson wrote, “On Monday, August 23, 2021, an administrative error led to the false issuance of a Tribal Event Wagering Operator License to Cliff Castle Casino Hotel entirely outside of the license allocation process used to distribute the available licenses.
Upon learning of this error, the Department immediately retracted the falsely issued license and notified the applicant accordingly.”
The ADG says it spoke directly with Cliff Castle representatives again on Aug. 25, to let them know that the “employee involved in the false issuance due to administrative error was not involved in the allocation process and had no knowledge of any internal decisions on that matter,” and that that at that point the ADG’s “independent internal committee” had not yet reached final decisions on allocations.
That said, Sports Handle reported on Aug. 23 that FanDuel and Penn National Gaming/Barstool Sportsbook confirmed they were licensed, and on Aug. 25, BetMGM sent out a press release confirming it had also been approved for licenses.
Aaaaand they're at the starting line in Arizona. @FanDuel is partnered with Phoenix Suns and has plans for digital and retail sports betting as well as daily fantasy offerings.https://t.co/k0kfMroxal
— Sports Handle (@sports_handle) August 23, 2021
Broken trust
From the Cliff Castle perspective, the error has cast questions on the transparency of the process.
“During the licensing process, we had expectations that the Arizona Department of Gaming would be transparent in how the licenses would be awarded,” Cliff Castle General Manager Aaron Moss said via press release. “The fact that we were issued a license and then told that we did not get a license with no explanation has raised more questions than answers about the license allocation process.”
PointsBet released a statement today after not being awarded a sports betting license in Arizona.
"Whilst disappointed that Cliff Castle was not awarded a license, PointsBet continues to assess market access opportunities in Arizona."
— RLinnehanXL (@RLinnehanXl) August 30, 2021
The agency received 16 applications from tribes and awarded licenses to 10. It also received 10 applications from professional sports teams/franchises and awarded eight. The ADG on Monday declined to say what happens to the two pro sports teams/franchise licenses that were not allocated or if it will open another application period in the future.
A day before the official announcement, one tribe and one commercial applicant filed lawsuits seeking to delay the projected Sept. 9 launch of sports betting. Emergency hearings in both cases are scheduled for Friday in Superior Court of Arizona, Maricopa County.
Timeline of events
Cliff Castle and the ADG offer slightly different takes on how things played out last week.
According to the Cliff Castle release, here is the timeline of events:
Aug. 23: ADG issues an event wagering operator license to Cliff Castle Casino.
Aug. 25: ADG contacts Cliff Castle management saying it mistakenly issued the license due to an “administrative error.” Cliff Castle representatives assume the error was one of timing, and that on Aug. 27, it would be granted a license.
Aug. 27: ADG notifies Cliff Castle that it “had not been allocated” a license. The ADG offers no explanation.
According to the ADG:
Aug. 23: An administrative error led to the false issuance of a Tribal Event Wagering Operator License to Cliff Castle Casino Hotel entirely outside of the license allocation process used to distribute the available licenses. Upon learning of this error, the Department immediately retracted the falsely issued license and notified the applicant accordingly.
Aug. 25: The ADG contacted Cliff Castle to assure it that the employee involved in the error was not involved in the allocation process, no allocation decisions had been made, and that the ADG would meet the allocation deadline of Aug. 27, 2021 for all Event Wagering Operator Licenses.
Aug. 26: The Department sent two additional written communications following up on these points to Cliff Castle representatives on Thursday, Aug. 26, 2021.
Prior to last week, Cliff Castle had been alerted by the ADG that it had made the first cut for potential licensees. The agency alerted those who made the first cut for licensing in mid-August before applying 19 criteria to determine which tribes would be licensed.
These tribes did get licensed
The ADG announced the following tribal licensees late last Friday:
- Fort Mojave Indian Tribe and SuperBook Sports
- Navajo Nation
- Fort Yuma Quechan and Kindred/Unibet
- Tonto Apache and Churchill Downs/TwinSpires
- Tohono O’odham
- Hualpai Tribe and Golden Nugget
- Ak-Chin Indian Community
- San Juan Southern Paiute and Digital Gaming
- San Carlos Apache and WynnBET
- Fort McDowell Yavapai
It’s unclear at this time if the tribe will appeal the decision or seek legal action.
Licensed operators were able to begin signing up customers and marketing Saturday. On the pro sports side, Bally’s (WNBA Mercury), BetMGM (NFL Cardinals), BetRivers (IFL Rattlers), Caesars (MLB Diamondbacks), DraftKings (TPC Scottsdale), FanDuel (NBA Suns), and Penn National Gaming/Barstool Sportsbook (Phoenix Raceway) have all been licensed.
