Judge ruled against native tribe in lawsuit that could have derailed sports betting rollout in Arizona

Judge makes ruling on sports betting in Arizona

The ruling comes after a Native American tribe in Arizona filed the lawsuit in a bid to stop sports gambling, saying the scheme was unconstitutional. FOX 10's Matt Galka reports.

PHOENIX - An Arizona judge has ruled against a Native America tribe in a lawsuit that could have impacted the rollout of sports betting in Arizona.

Lawsuit claims sports gambling expansion is unconstitutional

The lawsuit, which was filed by the Yavapai Prescott Tribe, claims sports gambling is an unconstitutional expansion of gaming in Arizona, violating a voter-passed initiative called Proposition 202.

Derrick Beetso, who is with the Indian Legal Program at Arizona State University's Sandra Day O'Connor College of Law, said prior to oral arguments being made that the lawsuit could have legs.

"You have a lot heavy hitters, a lot of monetary interests involved here, and it always makes for a lively scenario for litigation, right?" said Beetso.

Lawyers make their arguments in court

A judge heard from all sides of the case on Sept. 5. During the arguments, lawyers representing the tribe claims it will experience exponential harm by losing customers to apps and sports books.

"The questions is: how much money is going to be taken away from Yavapai and their critical services, such as education, clean water?
said Nicole Simmons, an attorney representing the Yavapai-Prescott Indian Tribe.

Meanwhile, lawyers representing the Arizona Department of Gaming say postponing the launch date will cost millions.

"The applicants and licensees have all put in incredible amount of effort," said Patrick Irvine. "Revenue loss would be in the millions per month of every delay."

Lawyers representing Governor Doug Ducey also chimed in.

"They are actually asking that this court turn back the clock, so they can get a do over," said Anni Foster.

In his ruling, Judge James Smith said Proposition 202 did not limit gambling to casinos, only specifying what gambling could occur at those casinos.

The Yavapai-Prescott Tribe could appeal the ruling. Meanwhile, State Rep. Jeff Weninger, who is the main sponsor of the bill that legalized fantasy sports and event wagering, spoke out about the ruling.

"I'm very excited with the judge's decision," said State Rep. Weninger, who is a Republican. "We're going forward, it looks like, on Thursday. You know, there can always be appeals and stuff, so I;m cautiously optimistic. A little guarded, but it's a great night. It looks like we're moving forward."

Besides the lawsuit filed by the tribe, officials with Turf Paradise also filed a lawsuit, claiming they were unfairly excluded from a license because they weren’t considered to be a professional sports franchise. They argue that horse races are professional sports.

Betting expansion came as a result of new legislation

Legislation that Gov. Doug Ducey signed earlier in 2021 greatly expanded sports betting in Arizona. Six operators — DraftKings, FanDuel, FFPC, Yahoo, Fantasy Sports Shark and Underdog Sports — have licenses to sign up players who build their own teams and wager on virtual games.

The legislation Ducey signed also expanded the type of gambling allowed at tribal casinos and lets tribes and pro sports teams take wagers on sporting events. Gamblers won’t be able to do that traditional sports betting online or at teams’ venues until Sept. 9.

Fantasy sports betting began on Aug. 28. Prior to that, Arizona was among one of the last holdouts to allow wagers and the collection of winnings on the popular online pastime.

Licenses have been awarded

The Arizona Department of Gaming awarded licenses on Aug. 27 to 10 Native American tribes and eight professional sports teams or venues to take bets online. While tribes already could run sportsbooks at two dozen casinos under the newly revised state gambling compacts, they needed a license for online sports wagering.

Sixteen tribes applied for a license. The Gaming Department said it used criteria that included community contributions, regulatory compliance and the ability to operate sports betting within six months to vet the applicants. It also said it wanted to ensure geographic diversity.

Department director Ted Vogt said the license awards were the result of a rulemaking process with input from the public and others to ensure impartiality and fairness for the applicants.

The sports teams and venues that received licenses can run sports betting operations at their respective stadiums, NASCAR racetracks or golf courses, and at a retail location within a quarter-mile and online.

The licensees can partner with a third-party to develop and run their sportsbooks and online presence.

In many ways, online licenses are much more valuable than being able to run a traditional "sportsbook" at a tribal casino or at or near a pro sports team’s stadium. That’s because online operations can run around the clock with little overhead and aren’t limited to gamblers physically being in a venue.

The tribal licensees are: Ak-Chin, Fort Mohave, Navajo, Quechan, Tonto Apache, Tohono O’odham, Hualapai, San Juan Southern Paiute, San Carlos Apache and Fort McDowell Yavapai.

The pro sports teams and venues are: Arizona Cardinals, Arizona Diamondbacks, Phoenix Suns, Arizona Coyotes, Phoenix Mercury, TPC Scottsdale, Phoenix Speedway and Arizona Rattlers.

Mental Health expert expresses worry

As the rollout of sports betting continues, some mental health experts say they are worried about what could happen, in terms of gambling addiction.

"Online gambling can be done anywhere anytime. By nature, it's quite isolating, which creates even more risk. It scares me a lot," said Jeff Schwartz with The Addiction Recovery Evolution.

In terms of addiction, the state has resources available, including the ability to get help, free of charge.