In September 2021, sports and event betting became legal in Arizona. (Two of the professional sports licenses have not been assigned and are available to a qualifying applicant, and a bill is pending at the legislature to add twelve more licenses for allocation to tribal nations.) Between September 2021 and November 2022, more than $7 billion has been wagered in Arizona, generating more than $30 million in revenue for Arizona’s general fund.
Arizona’s 2021 statute authorizes and regulates sports betting, online gaming and betting, and event wagering conducted by professional sports organizations and tribal nations. The Arizona Department of Gaming created 10 licenses for professional sports teams, 10 licenses for the state’s tribal nations and, at this time, an infinite number of limited or temporary licenses authorized for specified events, such as horse racing and the Emmys; while the Arizona Department of Gaming also regulates fantasy sports contests, its authority is over only certain types of fantasy sports contests. In addition to application fees, annual fees and renewal fees, the fees for licensure start at $1,500 and max out at $750,000, depending on the type of license.
Arizona, unlike Nevada, does not require in-person registration for online betting. As a result, much of Arizona’s betting occurs online through sportsbook apps. Arizona residents and nonresidents alike may place bets as long as the bet originates within Arizona. Sportsbook apps determine whether a user is in Arizona by using the location services on the user’s phone or computer. The Arizona Department of Gaming maintains a website at https://gaming.az.gov/ewfs/faqs with a list of authorized sportsbook apps and other gaming information.
The 2021 statute allows users to place bets on professional and collegiate sports or athletic events, as well as motor race events, e-sport events and Olympic events. However, certain bets are still prohibited, including bets on the occurrence of injuries or penalties, any high school sports, or the performance of individual college athletes in specific games.
Currently, event wagering is authorized on sports and “other events.” Other events are qualified as those expressly permitted by the Arizona Department of Gaming and those that are a “competition of relative skill.” Poker and blackjack, among others, are generally considered games of relative skill. But neither of these is expressly authorized or prohibited, which creates a gray area in the law. The latest proposed revisions to the event wagering regulations would change that language to prohibit wagering on electronic internet or mobile app games that replicate slot machines, blackjack, poker or other casino-style games. If enacted, time will tell whether the proposed language would permit players to wager on the outcome of the game itself or on another player’s outcome, such as in an online poker tournament.
The list of permissible wagers and events is constantly expanding. As of February 2023, wagers are permitted on 63 events. The list includes the major professional sports of football, baseball, basketball and boxing. But wagering is also allowed on lesser-known and international sports, including Irish football, Gaelic Games, Aussie rules football, and the national sport of Finland: pesäpallo. As one would expect, the Arizona Department of Gaming may also revoke or suspend authorization for wagers.
The “other events” category allows wagering on events not traditionally described as “sports.” Some of the lesser-known events include live eating competitions, chess and cornhole. This also includes bets on Hollywood awards shows such as the Emmys, the Academy Awards and the Grammys (sorry, Kids’ Choice Awards). To be clear, bets are not permitted on the likelihood that a Hollywood star will trip on the stairs while making their way to the stage. For now, the authorized wagers on such events are limited to bets on who will take home the awards.
Arizona also authorizes certain types of “proposition bets,” which are bets that are not tied to the outcome of the event. Proposition bets received substantial media coverage during the 2023 Super Bowl, including wagers on the length of the National Anthem and on the color of the Gatorade dumped over the winning coach’s head (spoiler alert: it was purple, although not shown on the national broadcast). Neither of those bets is currently authorized in Arizona, but fans were permitted to bet on the outcome of the coin toss.
Arizona Breaks Records
The year 2023 marked the first time in National Football League history that the Super Bowl was played in a state where sports betting was legal. Although the Arizona Department of Gaming has not yet released its February 2023 sports betting figures, it will likely be one for the record books. GeoComply, a company used by sportsbook apps to verify user location, published statistics from Super Bowl weekend showing that more than 100,000 transactions were verified in just the areas surrounding State Farm Stadium, where the Super Bowl was held. We will have to wait a little longer to see just how big a betting weekend Arizona experienced — and how much Arizona profited from it.
|Kortney Otten handles commercial bankruptcy and business law, including contracts, transactions, litigation, and cannabis law at Gallagher & Kennedy. Before law, Kortney acquired 20 years of hands-on business and operations experience as an owner of multiple franchised restaurants, companies involved in manufacturing neutraceuticals, and real estate and investment interests.|
|Sarah Myers is a transactional attorney at Gallagher & Kennedy working in the areas of real estate, business law, corporate bankruptcy, and environmental and natural resources.|
|Established in 1978, Gallagher & Kennedy is an Arizona-based law firm with 58 attorneys in Arizona and New Mexico representing clients from Fortune 500 companies to startups, small businesses and individuals. A national reputation and multi-disciplinary practice, combined with the personal client service found only in a local law firm, Gallagher & Kennedy provides high-caliber boutique service to every client.|