Arizona House OKs gambling bill amid transparency questions

PHOENIX (AP) — Some Democrats in the Arizona House on Thursday raised transparency and fairness questions about a major expansion of gambling Republican Gov. Doug Ducey needs as part of his thus-far secret deal with Native American tribes to update their gambling compact.

The issues arose before the House voted 48-12 to approve a proposal that would allow betting on professional and college sports at sites owned by pro sports teams and at tribal casinos. It would also allow gambling on fantasy sports and new Keno games at horse race tracks and fraternal organizations.

Nine majority Republicans and three Democrats voted against HB2772, which received enough bipartisan votes to become effective immediately upon the governor’s signature. The Senate has a nearly identical measure, SB1797, that has been briefly held up but is expected to advance soon. Similar questions were raised in Senate committee hearings.

Passage of the legislation is tied to the updated gaming compact Ducey has struck with tribes but not released to the public.

“I’m very opposed to the linkage of this bill to the enactment of the compact,” Tucson Democratic Rep. Randall Friese said. “This body has no role in the renegotiation of the gaming compact. This administration has now given us a role in this process. I object to that.”

Friese said Ducey should have instead had the tribal gaming compacts signed, sealed and delivered and then asked lawmakers to approve new gambling outside of tribal casinos. He also raised concerns about the secrecy surrounding the deal Ducey negotiated with tribes, noting that he has not released its terms.

And Rep. Reginald Bolding, who ended up backing the measure, said he’s worried that 10 sport gambling book licenses are set aside for major sports organizations, with no set fees and no opportunity for any other group to even bid on the potentially lucrative licenses.

The bill sponsor, Republican Rep. Jeff Weninger, said major sports teams contribute to the community and have the financial ability to operate sports betting operations.

“We wanted people who were financially solvent that we knew were going to be here,” Weninger said. He also downplayed the fee issue, saying he’s “assuming, hoping,” that the state Department of Gaming sets fees that are fair.

Bolding conceded that sports teams like the Arizona Cardinals do good work in the community.

“I think that issue is separate and aside from the fact that we are creating a market that only one set of players has access to,” Bolding said.

Ducey announced “an opportunity for a modernized gaming compact that will bring in more revenue for our tribal nations and our state budget,” in his January State of the State address last month. Ducey has been working on a new deal with tribes for several years, hoping it can boost state revenue by allowing gambling outside of tribal-run casinos.

The biggest part of the plan would allow pro sports teams like the Phoenix Coyotes, Arizona Diamondbacks and Arizona Cardinals run sports betting operations at their respective venues, at a retail location within a quarter mile and online. There would be 10 licenses awarded to sports, which could include professional golf and even NASCAR.

Tribes would also get 10 licenses and could run sports books at two dozen tribal casinos in the state.

The tribes, which have fiercely protected their exclusive right to most gambling in the state under the gaming compact approved by the state’s voters in 2002, get the right to build some new casinos under an updated deal. And in a big win, they would also be allowed to greatly expand their exclusive gambling offerings, adding games like Baccarat and craps to existing offerings of slot machines, blackjack and poker.

And there are options for online gambling as well, allowing growing online gambling sites like Draft Kings to piggyback on the licenses.

Fantasy sports gambling also is embraced by Weninger’s proposal. The state would allow any company that meets it standards to run fantasy sports gambling operations.

Both the legislation and a 20-year extension of the state’s gaming compact with tribes must be adopted for either to go into effect.

The amount of new revenue the state could receive hasn’t been officially estimated, but Weninger said it could easily exceed $100 million per year for the general fund. Bolding said lawmakers should be discussing a plan to use that money, which Republicans are eyeing as a way to lower taxes.

“If we’re going to generate $50 or $100 million, we probably should have a plan on where we’re going to put those dollars,” Bolding said. “We know our teachers need pay raises, we know we have a crisis in our health care, so we have to come up with a plan.”