Arizona State Senator Sonny Borelli used some legislative maneuvering, including changing the name of the bill—to not only keep his sports betting bill alive—but to allow it to advance in the Senate Appropriations Committee on a 6-3 vote.
In the original bill, SB 1158, introduced in January, Borelli would allow sports betting at commercial establishments, as well as private clubs such as VFWs as long as the kiosks are run by gaming tribes. It would also include stadiums and racetracks. But after two votes that bill didn’t look like it was going to make it out of the Commerce Committee, so Borelli lifted all of the language from his bill and dropped it into another bill he had filed with the Appropriations Committee: SB 1163. That bill was a prostitution classification bill. It was totally gutted and the language from SB 1158 was substituted for the original text. The only difference between the two bills is that in SB 1158 sports betting would be ban in Maricopa and Pinal counties.
The bill excludes restaurants. It also doesn’t offer mobile sports betting.
Borelli’s somewhat complicated bill reflects the political reality that many gaming tribes are demanding exclusivity for sports betting, but that commercial interests don’t want to be left out. His bill gives a little bit to both, although the tribes get the lion’s share.
The state currently has 16 gaming tribes that operate 24 casinos. In 2002 the state’s voters authorized Class III tribal gaming when they passed Proposition 202.
Borelli told Sports Handle, “I want to take advantage of the existing technology with the kiosk. I want to pick up that kiosk, take it out of the casino and put it in a liquor-licensed bar, a beer-and-wine bar or private clubs, like the Elks or VFW.”
Borelli argues that his bill would increase the consumer market by adding people who don’t normally visit a casino. He said that many people who wouldn’t drive to a casino to place a bet on a sports game might visit the local bar to do so.
The state would get some of the sports betting money by way of a 6.75 percent tax on revenue of all bets not made on tribal land.
Not all tribes favor Borelli’s bill. A few argue that it should be negotiated as part of an amendment tribal state gaming compact with each of the 16 tribes. The senator disagrees. He told Cronkite News, “It has to be done legislatively… They’re trying to hijack this issue to strengthen their own position, which weakens the position of the smaller tribes. I have a lot of small tribes in my district and I’m not going to be bullied by anybody.”
Tribal opposition speakers attended the hearing before committee vote. Of all that attended only the Navajo Nation supported the bill.
Otto Tso, Council Delegate of the Navajo Nation told lawmakers, “The Navajo Nation economy is facing a crisis. Thousands of Navajo jobs are threatened as the local mines and power plants close.” He added, “Indirectly it affects about 1600 jobs of the Navajo due to these closures and this bill is basically about revenue, jobs and how nations can sustain themselves. This is an opportunity that will happen the Navajo people of the northern region.”
Most of the tribes who opposed Borelli’s bill said the tribes should be able to negotiate amendments to their gaming compacts before the legislature approved of a bill. The senator insists that SB 1163 does not require anything, and if passed would allow the tribes to negotiate among themselves how to make it work.
Witnesses for the following tribes spoke against Borelli’s bill: The Tohono O’Odham, Yavapai, Cocopah and San Carlos tribes. Senator Michelle Ugenti-Rita asked several why they opposed the legislature taking up the issue, including Terry Rambler, of the San Carlos Apache Tribe.
“I am perplexed as to why the opposition to adding more Class III gaming? On the surface, wouldn’t you want more opportunity to expand?” said Senator Urgenti-Rita.
Rambler answered, “The San Carlos Apache opposes the bill. In our rural area … our tribe is the No. 1 employer, and it goes back to the idea that we don’t know what the impact would be. That process will reveal what should be. We want to take this process that we have always taken, and that is our position.
Urgenti-Rita followed up: “If this bill were to pass, does this have to be negotiated in the compact?”
Rambler commented, “Senator Borelli said this is a stand-alone bill, but we want it to be part of the bigger negotiation.”
This exchange underscores the position of many tribes across the U.S., that any changes to existing compacts should be done via compact negotiations, rather than by state legislatures.
The tribal representatives sounded aggrieved that they had not been individually contacted by Borelli, who contested what they were saying. He insisted he had talked to the tribes’ lobbyists. He urged, “contact your lobbyists because that is who represents you and that’s who we reached out to.”
However, Senator Lisa Otondo, whose district includes two tribes, told Borelli, “Not to be disrespectful, but you say you want to do what’s best for the tribes, but I represent two tribes, and I think they know what is best for them.” She added, “Every time I walk onto a reservation, I am walking into a different culture. And I have to respect that.”
Whether Borelli’s neither fish nor file approach—where tribes offer gaming but at commercial locations—is legal is open to question. The federal Indian Gaming Regulatory Act, which governs all Indian gaming in the U.S. reads: “Under federal law, only land owned outright by a tribe can be considered Indian land for purposes of the Indian Gaming Regulatory Act. There are further details that must be satisfied beyond outright ownership, but at a minimum the tribe must own the land. The leasing of space or land is not contemplated or authorized for the purpose of gaming is not authorized by IGRA.”
Moreover Arizona’s tribal state gaming compacts say: “All Gaming Facilities shall be located on the Indian Lands of the Tribe.”
Borelli says he is aware of these issues but believes they are obviated by the fact that the actual gaming takes place on the reservation. “This is what I am trying to accomplish,” he told Sports Handle. “The is kiosk is not, by definition, in the compact as a gaming device. The game is actually played where the book is, or the server is.”
That interpretation is used in Rhode Island, where the legislature just passed a bill that allows mobile sports betting, but the servers are located at one of two casinos.
Governor Doug Ducey has said he supports sports betting ever since the U.S. Supreme Court lifted the federal ban on it in May 2018, declaring the Professional and Amateur Sports Protection Act of 1992 unconstitutional. Writing for the majority Justice Samuel Alito wrote, “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”
“This is positive news,” Governor Ducey said at the time. “We have been working on a modernized gaming compact. This ruling gives Arizona options that could benefit our citizens and our general fund.”
According to the Arizona Department of Gaming, the gaming compacts include “detailed regulatory, technical, and internal control standards for the operation of Indian gaming.”
Stephen Hart, the attorney for the Arizona Indian Gaming Association, said he expects to see sports betting appear first on the tribal casinos. He told Cronkite News: “My suspicion is that there will be a relatively orderly and civil discourse about what should happen.” He added, “I think it’s most likely that tribes will initially offer sports wagering. After that, it certainly is possible that other entities could receive legal authorization to do it.”
Tribal gaming is big business in Arizona. Last year the tribal casinos generated more than $1.9 billion, according to the Arizona Department of Gaming. Of that the tribes paid the state $94 million. Governor Ducey has signaled that he will be pressing the tribes for a larger percentage, and see sports betting as a negotiating chip in that process.
