After nearly two years and over $10 billion in wagers, the Arizona Department of Gaming is preparing for the final round of licensing to reach the state’s designated number of sports betting licensees.
In a recent interview with BetArizona.com, ADG Director Jackie Johnson explained that the decision to open up the last two professional sports team licenses, as well as a tribal license previously held by the Ak-Chin Indian Community and Fubo Sportsbook, was primarily influenced by timing.
Only eight of the 10 Arizona sports betting licenses allotted to professional sports teams were awarded in advance of the September 2021 launch of wagering in the state. At that point, all 10 tribal licenses had been granted.
“The timing was influenced by several factors,” Johnson explained to BetArizona.com. “Those licenses were delayed due to litigation, which has now been resolved. We are now able to move forward. The same applies to the tribal license that has become available.
“So, the conditions are favorable now to issue these licenses.”
Landscape Changes with the Shutdown of Fubo Sportsbook
Johnson referred to litigation initiated by Phoenix-based racetrack Turf Paradise, which sued former Gov. Doug Ducey and the ADG for denying the horse racing track a professional sports team license in 2021.
The track has since been awarded a limited license which allows it to offer retail sports betting only. The track is partnered with Unibet Sportsbook Arizona.
Johnson and her team at the ADG are gearing up to review applications from multiple operators. The application period opens on August 1 and runs through August 15.
The availability of the lone tribal sports betting license arose following Fubo Sportsbook’s exit from its partnership with the Ak-Chin Indian Community in October 2022. Fubo Sportsbook handled just over $6.1 million in wagers during its tenure in Arizona.
The Ak-Chin is partnered with Caesars Sportsbook Arizona for its retail operation at the Harrah’s Ak-Chin Casino.
While Johnson, an ADG representative, and an Ak-Chin spokesperson chose not to detail the reasons behind the tribe losing its license, insiders in tribal gaming acknowledge the decision’s difficulty for all parties involved.
Derrick Beetso, director of Arizona State University’s College of Law Indian Gaming and Self Governance Programs, described the tribe’s current betting situation as “unfortunate.”
“It’s regrettable what transpired with Fubo Sportsbook, highlighting the intricacies tribes in Arizona and beyond face in navigating the sports betting landscape,” Beetso remarked to BetArizona.com. “I remain optimistic that the Ak-Chin Indian Community will ultimately realize the benefits agreed upon in their sports betting arrangement with the State.”
Longtime sports betting and iGaming industry insider Brendan Bussmann, who serves as the managing partner at B Global Advisors, said the 2021 Arizona betting apps law didn’t envision a scenario where an operator like Fubo Sportsbook would go under.
“It creates an intriguing dynamic regarding license ownership — whether it’s the tribe or their partner,” Bussmann explained to BetArizona.com. “At the very least, they could seek a new partner. However, without a partner, they may have forfeited the license, potentially allowing other tribes that have been waiting on the sidelines to step in. Initially, only 10 tribes were granted direct licenses.”
Licensing Process is Dictated by State Statues
In their press release announcing the licensing decision, the ADG stated they would “assess all received applications based on the established criteria outlined in the State’s event wagering rules and statutes,” a stance Johnson reaffirmed to BetArizona.com on Thursday.
“It’s all outlined in our statutes and rules,” Johnson emphasized. “These statutes define who qualifies to apply. Once applications are submitted, we will evaluate and determine eligibility.”
Johnson noted that the department anticipates significant interest in the remaining three licenses, given the state’s $10.1 billion in wagers since launching in 2021.
Several major wagering companies, such as Fanatics Betting and Gaming, Bet365, Betr, and Tipico Sportsbook, either missed out on or were not present during the previous round of licensing.
Johnson mentioned that her team has already begun receiving inquiries from operators, although she declined to specify which ones.
“Based on what I’m hearing from my team handling inquiries, there is considerable interest and anticipation,” Johnson remarked. “I expect we’ll see a number of parties eager to submit their applications.”
Remaining Pro Licenses’ Candidates Not Yet Determined
Under HB-2772, which legalized sports betting two years ago, a “pro sports team facility” is defined as one owned by a commercial, state, or local government entity that hosts professional sports events and has a seating capacity exceeding ten thousand. Additionally, it includes locations hosting annual PGA Tour golf tournaments and outdoor motorsports facilities hosting NASCAR national touring races.
Based on the 10,000-seat requirement, the only team eligible for a pro sports wagering license that does not currently possess one is the USL Championship soccer team, Phoenix Rising FC.
The Tucson Roadrunners’ home venue, Tucson Arena, accommodates 6,521 spectators for AHL hockey games. The arena also hosts the IFL Tucson Sugar Skulls, which can seat up to 8,962 attendees on game days.
Bussmann expressed concerns regarding the ADG’s ability to issue the final two sports team licenses, given the stringent criteria outlined in the regulations.
“The criteria for event wagering operators are quite specific, focusing on major professional sports like PGA and NASCAR,” Bussmann explained. “In addition to these, qualifying sports include NFL, MLB, NBA, NHL, WNBA, and IFL. There are few other professional sports in Arizona that meet these criteria, aside from perhaps Phoenix Rising.”
Bussmann also noted the challenges Turf Paradise Race Track faces in qualifying for a pro sports license, especially after their previous application was denied in September 2021.
“Turf Paradise has long sought a workaround in tribal gaming regulations, but the prospects for such a path forward remain slim,” Bussmann stated. “It would introduce significant complexities to the gaming landscape as it stands today. While they may continue to pursue options, expansion under current legal frameworks appears limited.”
Vincent Francia, general manager of Turf Paradise, indicated uncertainty about pursuing a full wagering license, which requires a substantial financial commitment.
“We’re evaluating our options, but given our previous denial, pursuing this license is uncertain,” Francia commented.
Representatives from Phoenix Rising FC, Tucson Roadrunners, and Tucson Sugar Skulls did not respond to requests for comment on their sports betting plans.
Ensuring Fair Access for All
With Johnson’s extensive background in tribal gaming law at both Quarles & Brady and Rothstein Donatelli, it’s unsurprising that as first-year director of the ADG, she prioritizes equitable licensing as a crucial objective for the department moving forward.
Johnson emphasized to BetArizona.com the critical importance of her team’s regulatory diligence in ensuring fair and consistent decisions regarding upcoming licensing for operators next month. This approach aims to establish solid foundations for the state’s sports teams and tribal partners.
Industry experts like Bussmann anticipate operators will be more inclined to secure partnerships for the lone tribal license, viewing it as a guaranteed entry into the market compared to the riskier prospects of obtaining one of the two available sports team licenses, which could be revoked if regulatory standards aren’t met.
“The tribal license offers the most straightforward path for new market entrants,” Bussmann explained. “Securing another professional sports license may require navigating more complexities, but further clarity is expected following the ADG’s upcoming information session.”
Johnson is committed to ensuring transparency and fairness in the ADG’s licensing decisions concerning the final three vacancies in the state.
“I prioritize consistency and fairness for all parties,” Johnson affirmed. “This is why we announced the availability of the two professional sports betting licenses and the lone tribal license simultaneously. This synchronized bidding process provides equal opportunity and enhances efficiency internally.
“My focus is always on maintaining equitable and transparent practices with all stakeholders involved in event wagering and tribal gaming,” she concluded.