Arizona Daily Fantasy Sports Remain Offline as Gambling Opposition Remains

Posted on: January 4, 2017, 06:00h. 

Last updated on: January 4, 2017, 03:03h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Arizona daily fantasy sports (DFS) operators remain banned from the state as 2017 gets underway, and unfortunately for those wishing to compete in the online contests, that reality isn’t expected to change anytime soon.

The legality of DFS has been widely discussed in state capitals across the country over the past 24 months. Today, 12 states have laws on the books authorizing daily fantasy play, and over a dozen more have pending legislation.

But in the Grand Canyon State, lawmakers largely remain opposed to DFS and gambling, though it accepts roughly $100 million annually from Native American casinos.

Arizona Governor Doug Ducey (R) agreed to reopen its tribal compact in November to allow sovereign nations to increase the name of games at their 23 casinos. In exchange, the tribes must agree to forego the construction of any additional land-based casinos in the Phoenix metropolitan area.

Notably absent, however, was the powerful Tohono O’odham Nation. The tribe’s Desert Diamond West Valley Casino in Glendale is the primary reason for Ducey’s willingness to reopen the gaming compact.

“It’s time for us to modernize this compact to meet the changing needs of the state and to increase the opportunities for tribal gaming,” Ducey said last fall. “The time has come to allow each tribe more freedom.”

Ducey’s Wild Past

Ironically, Ducey is the nephew of Billy Scott, an online gambling pioneer who served time in an Arizona federal prison on charges of international money laundering and illegal internet wagering.

Scott today resides in Antigua, a Caribbean island that is friendly to online gaming companies.

Daily Fantasy Years Out

Arizona Attorney General Mark Brnovich sent letters to DFS market leaders DraftKings and FanDuel in 2015 that advised them not to commence operations in the state. “Participation in your games for monetary winnings violates Arizona law,” Brnovich explained to the fantasy sports companies.

The letter came as a result of New York Attorney General Eric Schneiderman’s findings that the online platforms took in $48,742 in entry fees from customers in Arizona in 2014. Brnovich and a slew of other state attorneys general have reached similar conclusions that DFS contests violate gaming laws.

“Ask 10 attorneys in the state of Arizona, ‘Are fantasy sports legal or illegal?’ you’re going to get 10 different opinions,” Head2Head Sports General Manager Stacie Stern told Havasu News. While Head2Head is based in Arizona, the DFS operator doesn’t allow state residents to access its contests.

Or Maybe Never

With Brnovich classifying daily fantasy sports as gambling, the Republican-controlled legislature would need to pass a DFS to specifically authorize the games. Two bills have been introduced in previous sessions, but both failed.

It’s easy to understand why support for fantasy sports is lacking in Arizona. Most conservatives are against gambling in the state, and giving companies like DraftKings and FanDuel the right to infiltrate its borders would come at a steep price.

Under the Arizona Tribal-State Gaming Compacts that first took effect in 1993, allowing commercial gambling into the state would nullify the Native American groups’ tax obligations. That would result in the loss of upwards of $80 million each year in state funding.