Licensing for Wagering Should Ensure Equitable Access, Says ADG Director Johnson

ADG Director Johnson Says Licensing About Equitable Access To Wagering
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After almost two years and more than $10 billion in bets, the Arizona Department of Gaming is gearing up for the last round of licensing to meet the state’s target number of sports betting license holders.

In a recent interview with yengols.com, ADG Director Jackie Johnson revealed that the decision to release the final two professional sports team licenses and a tribal license once held by the Ak-Chin Indian Community and Fubo Sportsbook was primarily driven by timing.

Before the launch of sports betting in Arizona in September 2021, only eight out of the 10 designated licenses for professional sports teams were granted. However, all 10 tribal licenses were awarded at that time.

Johnson told yengols.com that the timing of the project was affected by various factors. The holdup in getting licenses was because of ongoing legal battles, but now that those have been settled, they can proceed. Furthermore, a tribal license has been granted, opening up more opportunities for them.

Hence, the timing is perfect for their release.

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The closure of Fubo Sportsbook changes the scenery.

Johnson brought up a legal action taken by Turf Paradise, a Phoenix-based racetrack, against former Governor Doug Ducey and the ADG. The lawsuit was a result of the department’s refusal to grant the horse racing track a professional sports team license in 2021.

The track has partnered with Unibet Sportsbook Arizona to offer retail sports betting exclusively on casino premises, thanks to a recently obtained restricted license.

Johnson and her team at the ADG will meticulously evaluate the applications received from operators. The application period will commence on August 1st and conclude on August 15th.

Following the closure of Fubo Sportsbook in October 2022, the Ak-Chin Indian Community became the sole holder of a tribal sports betting license in Arizona. The partnership between Fubo and the community came to an end, with Fubo handling approximately $6.1 million in wagers during its tenure.

Caesars Sportsbook Arizona has teamed up with Ak-Chin to run its retail operation at Harrah’s Ak-Chin Casino.

Johnson from the ADG and a spokesperson from the Ak-Chin tribe both chose not to reveal the specifics of the license revocation, however, tribal gaming experts speculate that the decision has been challenging for all parties involved.

Derrick Beetso, the director of the Indian Gaming and Self Governance Programs at Arizona State University’s College of Law, characterized the tribe’s current betting situation as “unfortunate.”

Beetso voiced his dissatisfaction with the circumstances surrounding Fubo Sportsbook, highlighting the obstacles that tribes in Arizona and beyond encounter within the sports betting sector. Despite this, he holds onto hope that the Ak-Chin Indian Community will ultimately benefit from their partnership with the State concerning sports betting.

Brendan Bussmann, an experienced industry professional in sports betting and iGaming as the managing partner at B Global Advisors, noted that the 2021 Arizona betting apps legislation did not account for the possibility of a company like Fubo Sportsbook going under.

Bussmann told yengols.com that the current situation presents an interesting dilemma concerning the ownership of the license – whether it belongs to the tribe or their partner. Without a partner, the tribe could have forfeited the license, opening up the possibility for other tribes who have been waiting for an opportunity to secure a direct license as only 10 were initially issued.

The licensing process is determined by state statutes.

In the press release issued by the ADG regarding the licensing decision, the department announced that they will carefully evaluate all applications in compliance with the State’s event wagering regulations and laws, a stance that Johnson verified with yengols.com.

Johnson detailed that the eligibility criteria are defined in the statutes and regulations. After receiving applications, a decision will be made on which individuals qualify.

Johnson mentioned that the department is expecting a high demand for the remaining three licenses, pointing to the state’s $10.1 billion in wagers since it was introduced in 2021.

Fanatics Betting and Gaming, Bet365, Betr, and Tipico Sportsbook are some of the big betting companies that were either absent or chose not to take part in the state’s previous licensing process.

Johnson stated that her team has already started receiving inquiries from operators, however, she did not reveal the identities of those who have reached out to them.

Johnson reported that his team has received feedback indicating a strong level of interest and anticipation among individuals. He anticipates that there will be multiple parties interested in submitting applications.

Remaining Pro Licenses Candidates Unclear

HB-2772, passed two years ago, legalized sports betting and defines a “pro sports team facility” as a venue owned by a commercial, state, or local government entity that hosts professional sports events with a seating capacity exceeding ten thousand. It must also host an annual PGA Tour golf tournament and a national stock car racing event at an outdoor motorsports facility within the state.

Phoenix Rising FC is the sole team in the USL Championship that would meet the 10,000-seat requirement for a professional sports betting license, given that they are the only team in the league without one.

The Tucson Arena, where the Tucson Roadrunners AHL hockey team plays, can seat 6,521 people. Additionally, the arena is home to the IFL Tucson Sugar Skulls, who can host up to 8,962 fans on game days.

Bussmann is worried that the ADG may encounter obstacles in finalizing the last two sports team licenses because of the strict regulations that have been imposed.

Bussmann pointed out that event wagering operators in Arizona are restricted to a select few professional sports for betting, including PGA, NASCAR, NFL, MLB, NBA, NHL, WNBA, and IFL. He mentioned that besides Phoenix Rising, there are few other professional sports teams in the state that qualify for betting purposes.

Bussmann also noted that the likelihood of Turf Paradise Race Track obtaining a professional sports license was low, particularly as they were unsuccessful in securing one in September 2021.

Bussmann revealed that Turf Paradise has been trying to circumvent tribal gaming regulations for years, but the odds of success are low. He is convinced that exploring this avenue would disrupt the gaming industry and face resistance from current stakeholders. Despite continuous attempts, Bussmann does not anticipate any growth opportunities within the current legal framework.

Vincent Francia, the general manager of Turf Paradise, stated that the track has not yet made a decision on acquiring a full wagering license. This license comes with a $100,000 application fee, a $750,000 initial license fee, and annual payments of $150,000.

Francia mentioned that they are thinking about obtaining the license, but since they were turned down for it before, they may decide not to pursue it based on their previous rejection.

Representatives from Phoenix Rising FC, the Tucson Roadrunners, and the Tucson Sugar Skulls have not yet responded to inquiries regarding their sports betting strategies.

Ensuring Fair Access for All

Given Johnson’s deep expertise in tribal gaming law from his time at Quarles & Brady and Rothstein Donatelli, it is expected that the new director of the ADG will focus on ensuring fair licensing as a key goal for the department moving forward.

Johnson stressed to yengols.com the importance of regulators on her team meticulously evaluating and making impartial decisions when choosing which operators will be granted licenses next month. This is crucial in guaranteeing the long-term stability and prosperity of the state’s sports teams and tribal partners.

Industry experts, such as Bussmann, suggest that operators are more inclined to pursue a partnership for a single tribal license instead of risking obtaining one of the two sports team licenses that may be revoked if regulators find that the team does not meet the required standards.

Bussmann recommended that obtaining a tribal license could be the easiest option for a new market entrant, as it is seen as a guaranteed opportunity. Securing a different professional sports license might involve some strategic planning, but additional details will be provided following ADG’s upcoming information session.

Johnson is committed to ensuring that the ADG’s licensing decisions for the three remaining vacancies in the state are fair and transparent.

Johnson emphasized the importance of maintaining consistency and fairness for all parties involved, which is why the decision was made to release the two professional sports betting licenses and the lone tribal license for notice at the same time. This approach was taken to ensure equal opportunities and timelines for all interested parties, while also streamlining processes within the organization.

As a result, I consistently monitor to ensure fairness and consistency for all parties involved in event wagering and tribal gaming.

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Author

Peterson Christopher

Peterson Christopher has over seven years of experience covering sports and sports betting in Arizona. He has worked with ArizonaSports.com, the Tucson Weekly, and the Green Valley News. He is currently the lead writer at yengols.com.

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