Arizona Sports Betting May Be Live As Early As This Fall

We reported earlier in April that AZ Governor Doug Ducey had signed a sports betting bill into law. It’s increasingly apparent that this law will be taking effect by the end of the year, if not sooner. HB 2772 provides 20 licenses for online and in-person sports betting to be conducted by ten tribal casinos and ten sporting venues throughout the Grand Canyon State.

Still Waiting on U.S. Department of Interior’s Approval

Tribal compacts with states are incredibly complicated. The U.S. Department of the Interior was given extra authority over the regulation of gaming on tribal lands in the Indian Gaming Regulation Act of 1988. Unlike some other sports betting laws in the U.S., the Arizona bill amends tribal compacts to give them an expanded reach for game types, including mobile play and new in-person casino game types.

Simply, because the law will make changes to tribal compacts, the provisions established by the now-law HB 2772 must be approved by the Dept. of the Interior in order to fully pass muster on a federal level. The law must be published in what’s called the Federal Register in order to be considered official, which will happen by September at the latest.

Sportsbook Promotions At Stake With Text Of Amendments

One of the amendments to HB 2772 will challenge sportsbooks’ ability to offer their promotions. In Chapter 11, section 1 of the bill’s text, it is stated that “for year six and each year thereafter, a deduction of free bets (from tax liability) is not allowed”. These restrictions to how sportsbooks can use promotions to offset their tax liability starts in the early days of AZ sports betting.

A sportsbook’s ability to offer promotions massive affects its ability to draw in new customers. Public comments will be taken after the Department of Gaming spends 60 days reviewing the bill’s text, which puts us right around June 15th, 2021. It’s almost certain that representatives of the major sportsbooks with interests in Arizona, including DraftKings, William Hill, and FanDuel will have something to say about the tax liability restriction.

It’s uncertain whether or not the free bet tax restrictions will end up in the final version of the law. After the public comment period of 30 days elapses from June to July, the Department of Gaming will have the opportunity to amend the text of the law. The smart money is on amendments happening, with sportsbooks having a vested interest in keeping promotions as part of their expenses instead of having them not count, and instead be taxable. If said promotional expenses don’t count, it would look as if the books have more income than they actually do, a big hit to their ability to bring in revenue.

What’s the Potential Timeline for AZ Sports Betting?

As things stand right now, Arizona legislators, sports teams, and tribes are all pushing to have betting go live by the time NFL season rolls around. There’s an outside chance that rules will be finalized before then, if the Federal Register approves the bill quickly and the amendments made by the Department of Gaming happen in a timely fashion.

All things considered, if the stars align, the Federal Register quickly approves the bill, and the amendments are finalized with haste, we may see sports betting go live in Arizona as quickly as late summer. However, September is the target for the majority of involved parties, so we’re hoping that legislators and operators alike can meet the mark and offer bets on the early 2021 NFL season.