ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
ENACTED
AMENDED
FACT SHEET FOR h.b. 2772/S.B. 1797
fantasy sports betting; event wagering.
Purpose
An emergency measure that authorizes electronic keno and mobile draw games outside the jurisdiction of an Indian tribe and authorizes event wagering and fantasy sports betting in Arizona. Prescribes requirements for event wagering and fantasy sports betting off of Indian lands and establishes related funds. Conditions the enactment of expanded gaming authorizations on certain Indian tribes entering into the 2021 gaming compact amendments (2021 compact amendments).
Background
Arizona's Criminal Code prohibits: 1) the promotion of gambling, except for amusement gambling, regulated gambling or social gambling; and 2) benefiting from gambling, except for amusement gambling or regulated gambling (A.R.S. 13-3303 and 13-3304). Regulated gambling is gambling conducted in accordance with: 1) an Arizona tribal-state gaming compact (gaming compact); or 2) Arizona or federal statute, rule or order (A.R.S. 13-3301). Except for pari-mutuel wagering on horse races, a person may not engage in the business of betting and wagering, for a fee, property, salary or reward, on the result or purported result of a race, sporting event, contest or other game of skill or chance or any other unknown future event or occurrence (A.R.S. 13-3305).
Federal law requires
an Indian tribe and the state to negotiate for a tribal-state compact governing
the conduct of class III gaming activities on tribal lands (25 U.S.C. 2710
(d)(3)(B)). The gaming compacts between Arizona and the 22
federally-recognized Indian tribes in Arizona are substantially identical and
outline the regulatory framework governing class III gaming. In accordance with
statute and the gaming compacts, the Arizona Department of Gaming (ADG):
1) monitors tribal gaming operations; 2) investigates suspected compact
violations; 3) conducts compact compliance reviews of gaming operations,
facilities and activities of facility operators;
4) certifies gaming employees who are not enrolled tribal members; 5) certifies
management contractors, financiers, manufacturers and suppliers of gaming
devices, providers of gaming services and management officials; 6) administers
the transfer of unused gaming device allocations; 7) provides problem gambling
prevention, treatment and education; and 8) administers and allocates Indian
tribes' state contributions through the Arizona Benefits Fund as outlined (A.R.S. Title 5, Chapter 6).
The Joint Legislative Budget Committee fiscal note on S.B. 1797, as amended by the Senate Commerce Committee, estimates that this legislation may generate $34.2 million in annual state General Fund revenue by FY 2024 (JLBC).
Provisions
2021 Compact Trust Fund (Trust Fund)
1. Establishes the Trust Fund consisting of contributions from Indian tribes as designated in the 2021 compact amendments and directs the ADG to administer the Trust Fund as trustee.
2. Requires Trust Fund monies to be disbursed in accordance with the 2021 compact amendment for the exclusive purposes of:
a) mitigating impacts to Indian tribes from gaming authorized by a 2021 compact amendment; and
b) providing economic benefits to beneficiary Indian tribes.
3. Specifies that Trust Fund beneficiary tribes are federally-recognized Indian tribes with a 2021 compact amendment that:
a) are eligible to receive payments according to the 2021 compact amendment terms; and
b) include tribes that do not engage in gaming but have a 2021 compact amendment.
4. Requires the State Treasurer to:
a) accept, separately account for and hold Trust Fund monies in trust;
b) on notice from the Director of the ADG, invest and divest any Trust Fund monies deposited in the State Treasury; and
c) credit any earned investment monies to the Trust Fund.
5. Requires surplus Trust Fund monies, including any unexpended and unencumbered balance at the end of a fiscal year, to be carried forward and not reverted or transferred to any other fund and exempts Trust Fund monies from lapsing.
6. Prohibits the State Treasurer from commingling trust monies with any other monies except for investment purposes.
7. Specifies that the Trust Fund does not include tribal contributions made into the Arizona Benefits Fund.
8. Requires, by September 30 of each year, the ADG to report all monies deposited in and disbursed from the Trust Fund during the prior fiscal year to:
a) the Governor;
b) the President of the Senate and the Speaker of the House of Representatives; and
c) each Indian tribe with an executed 2021 compact amendment.
9. Defines
2021 gaming compact amendment, for the purposes of the Trust Fund, as a
tribal-state gaming compact amendment that becomes effective after January 1,
2021.
Electronic Keno and Mobile Draw Games
10. Authorizes the State Lottery Commission or the Lottery Director to establish and operate a single electronic keno game and single mobile draw game on a lottery-controlled centralized computer system allowing a player to, over the internet including on a personal electronic device:
a) place wagers;
b) view the outcome of a game; and
c) receive winnings.
11. Limits licensing for operation of an electronic keno game to:
a) a fraternal or veterans' organization, a racetrack enclosure or additional wagering facility where pari-mutuel wagering on horse races is conducted; and
b) a physical facility at least five miles from an Indian gaming facility.
12. Caps the number of authorized keno locations at the total number of:
a) licensed live horse race wagering and simulcast wagering establishments; and
b) class 14 liquor licenses issued to fraternal or veterans' organizations as of January 1, 2021.
13. Increases, by two percent every two years, the total number of authorized keno locations.
14. Requires players of an electronic keno game on personal electronic devices to be restricted by geofencing to authorized keno locations.
15. Limits the frequency of:
a) electronic keno game draws to once every four minutes; and
b) a person playing or winning a prize for a mobile draw game to once an hour.
16. Allows a mobile draw game to offer multiple game play styles and wagering options.
17. Prohibits an electronic keno game or mobile draw game from presenting a user interface that:
a) depicts spinning reels; or
b) replicates a slot machine, blackjack, poker roulette, craps or any other casino-style game other than traditional keno or lottery draw games.
18. Exempts an electronic keno game or mobile draw game from the prohibition on a lottery game using gaming devices or video lottery terminals.
19. Allows the Director of the State Lottery Commission to adopt rules for the licensing of authorized keno locations, including the person that controls the business or other activity conducted at the location.
20. Specifies that the method of selecting winning tickets or shares for State Lottery noncomputerized online games may not depend on the results of any gaming activity conducted according to the 2021 compact amendments or the results of any event.
Authorization of Event Wagering
21. Authorizes accepting wagers on sports, including e-sports, or other events, portions of events, individual performance in events or any combination by any method including in person or over the internet (event wagering) that is conducted:
a) in accordance with an ADG-issued event wagering license; or
b) by an Indian tribe exclusively on Indian lands in accordance with a gaming compact and any amendments.
22. Authorizes the ADG to issue event wagering operator licenses to:
a) up to 10 applicants other than an Indian tribe; and
b) up to 10 Indian tribes in Arizona if the receiving tribe has signed the most recent gaming compact and applicable amendments or appendices.
23. Limits persons eligible for event wagering operator licenses to:
a) an Indian tribe, or entity fully owned by an Indian tribe, or its designee contracted to operate mobile event wagering in Arizona but outside the boundaries of its lands; and
b) an owner of an Arizona professional sports team or franchise, operator of a sports facility that hosts an annual tournament on the PGA Tour, the promoter of a national association for stock car auto racing national touring race in Arizona or the owner's, operator's or promoter's designee contracted to operate both retail event wagering at a sports facility or complex and mobile event wagering throughout Arizona.
24. Specifies that an event wagering operator licensee that is an Indian tribe, entity fully owned by an Indian tribe, or its designee, is authorized to operate only mobile event wagering.
25. Authorizes an event wagering operator licensee that is not an Indian tribe or tribal-owned entity to offer:
a) event wagering at an event wagering facility within a five-block radius of the operator's sports facility; and
b) mobile event wagering, including through an event wagering platform, as the ADG specifies.
26. Prohibits a licensed event wagering operator from accepting a wager from a person physically present on Indian lands at wager initiation.
27. Deems, as not responsible for the designee's conduct, an owner, operator, promoter or Indian tribe that qualifies for an event wagering operator license and appoints a designee to be a licensed event wagering operator.
28. Allows an event wagering operator to:
a) contract with an ADG-licensed management services provider to conduct event wagering; and
b) partner with an ADG Division of Racing-permitted racetrack enclosure or additional wagering facility to obtain a limited event wagering license (limited wagering license) for wagering at a single, specific physical location.
29. Authorizes the ADG to issue 10 limited wagering licenses for event wagering at 10 locations.
30. Allows wagers on racing meetings or simulcasted races to be made, offered or received through the same means as other wagers in addition to according to existing law, unless otherwise prohibited by federal law.
31. Requires an event wagering facility within one mile of a tribal gaming facility to be:
a) within a sports complex with retail centers adjacent to the sports facility; and
b) one fourth of a mile or less from a sports facility within the sports complex.
32. Restricts, to an event wagering operator or its management services provider, the authority to process, accept, offer or solicit wagers.
33. Requires an event wagering operator to clearly display its own or affiliate brand on the event wagering platform.
34. Allows an event wagering operator to use:
a) more than one event wagering platform; and
b) the management services provider's brand as the platform's name and logos, if the platform also clearly displays the operator's own trademarks and logos or those of an affiliate.
35. Specifies that Indian tribes operating event wagering exclusively on Indian lands are exempt from licensure requirements and are governed by the gaming compact, its appendices and any amendments, and the Indian Gaming Regulatory Act.
Event Wagering Fund and Licensure Fees
36. Establishes the Event Wagering Fund consisting of licensure fees and all monies collected relating to event wagering.
37. Authorizes the ADG, unless otherwise provided by the Legislature, to spend up to 10 percent of Event Wagering Fund monies on the annual event wagering regulation and enforcement costs and reverts remaining monies to the state General Fund.
38. Transfers, to the state General Fund, Event Wagering Fund monies remaining on the 25th day of each month.
39. Directs the ADG to establish and collect fees for event wagering licenses and deposit event wagering license, limited wagering license, supplier license and management services provider fees in the Event Wagering Fund.
40. Requires the ADG to establish a fee for the privilege of operating event wagering and to consider, when determining the fee, the highest revenue share that an Indian tribe pays to the state according to the gaming compacts.
41. Specifies that the fee is d