The Arizona Department of Gaming on Friday reiterated that it continues to aim for a Sept. 9 group launch of sports betting platforms and retail locations, and said that it is hoping to have the rules process complete by mid-July. That information, and much more, came out during a virtual stakeholder meeting about the state’s event wagering draft rules.
More than 90 interested parties logged into the meeting, but FanDuel Director of Government Affairs Andrew Winchell and a few others took the lead in offering guidance and asking for clarification on everything from the use of official league data to how many skins per operator will be allowed to whether or not in-play wagering will be permitted. FanDuel is partnered with the Phoenix Suns for sports betting.
General consensus among the vocal potential operators and professional sports teams — who will be able to apply for “event wagering operator licenses” — is that all favor a single skin per licensee and are on board with a group launch on Sept. 9. ADG Director Ted Vogt said the idea behind a group launch date was to not have any one operator slow the launch process for others. He also indicated that the current public-comment period, which opened June 15 and closes June 21, won’t be the only opportunity for input.
“You will see significant changes to the rules based on the feedback we expect to get today and the written process we are keeping open until 11:59 p.m. on June 21,” Vogt said at the start of the meeting.
In response to concerns from Sen. Sally Ann Gonzales, who said she thought the public-comment period was much too short, Vogt said later in the meeting, “There will be a second round of public comment after rules are updated.”
Friday’s meeting was the first of two for event wagering stakeholders. A second meeting is set for 1 p.m. local time June 21. The ADG is also holding two meetings for stakeholder input on proposed daily fantasy regulations.
ADG’s timeline is aggressive
Because Arizona’s new sports betting law has an emergency clause attached to it, the ADG can suspend some of the usual timeframes while developing rules and preparing for launch. That said, launching operators by Sept. 9, which is less than five months after the law was signed by Gov. Doug Ducey, is an aggressive timeline. Only two states out of about 20 U.S. jurisdictions with live, legal sports betting were able to go from legal to live in less than five months: Indiana and Iowa. The first three to go live after the Professional and Amateur Sports Protection Act fell in May 2018, Delaware, New Jersey, and Mississippi, did not require new laws permitting sports betting.
Vogt promised updated timelines on licensing and rules in the coming weeks.
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— Ryan Randazzo (@utilityreporter) June 18, 2021
Aside from those key issues, stakeholders dove into detailed questions surrounding official league data, in-play wagering, the use of credit cards to fund player accounts, auditing, paying out winning wagers, and more. Some concerns will just require that language be cleaned up to properly express intent, while others will likely mean bigger changes when the next round of rules is released.
What stakeholders want clarified or changed
Here’s a look at some of the discussion:
Official league data: In most state laws, a sports governing body must request that official league data be used to settle certain wagers (usually in-play bets), otherwise operators can use a data provider of their choice. The Arizona draft rules call for the opposite, and allow for operators to request to not use official league data. This process could become cumbersome for both operators and the ADG, since not all official league data providers have data for all events — think table tennis or chess — and in some cases, like for the Academy Awards or Heisman Trophy, there is no “official” data available at all.
In-play wagering: The rules currently give bettors the “unilateral” right, Winchell said, to void wagers before an event starts. This is standard practice in pari-mutuel wagering, where the odds change up until post time. It is not standard in fixed-odds wagering, and Winchell asked that the rule be changed. Winchell also said that there is a “presumption that all tickets should be considered final at the start of the event,” which would make it impossible for in-play wagering to take place. ADG’s Vogt was clear that that was not the intent of the rule and that stakeholders could expect to see a change going forward.
Funding player accounts: Credit cards are not specifically listed as a way to fund player accounts, and consultant John Pappas asked that the ADG reconsider that position and include credit cards on the list of permitted ways to fund an account. Winchell also asked that language be massaged to reflect that any allowed forms of payment be used to fund player accounts rather than be used for each actual wager, as current language suggests.
Paying out winning wagers/withdrawals: The ADG took advantage of stakeholder knowledge on this topic, after Penn National Gaming Vice President of Compliance & Regulatory Affairs Rhea Loney asked for changes to how operators will keep the ADG apprised of investigations into players. There are times, Loney said, when a payout or withdrawal could be delayed because fraud is suspected. In that case, the operator would alert a player to a delay, telling them that the wager is under review. “If we think it rises to the level of suspicious activity, we would not tell the player until we tell the ADG,” Loney said.
How racetrack/OTB licenses will work
Arizona’s new law allows for a total of 20 “event wagering operator” licenses — the equivalent of a master license in other jurisdictions. Ten such licenses are earmarked for professional sports franchises and 10 for tribal entities. A key question looming is how the ADG will determine which 10 of Arizona’s 22 gaming tribes to award licenses to. That question wasn’t directly answered Friday.
There will also be 10 “limited event wagering operator” licenses available to racetracks and OTBs. It appears that in addition to getting a license, the tracks and OTBs will also have to partner with an event wagering operator in order to offer retail sports betting. There seemed to be some question about how these kinds of partnerships would work when Dave Auther, representing Arizona Downs, asked, “What would motivate a master licensee to contract with us? Money? Goodwill? Friendship?”
The answer is unclear, but whether partnering with a master license holder — for example the PGA or its sports betting operator DraftKings — or finding its own operator, racetracks and OTBs would still be in a situation where a deal would have to be struck. The current regulations appear to limit the pool of potential partners to 20 rather than allowing for tracks or OTBs to seek out a partner not already licensed by the state.
