How Arizona Balances Mobile Sports Betting And Responsible Gaming

Mobile sportsbooks are exciting new products for many Arizona sports fans. Sports betting can be a great way to score bragging rights and cash. Most Arizona sports bettors will enjoy healthy relationships with their new mobile sportsbooks and place sports bets for fun. 

However, some sports bettors will develop troubling gambling behaviors. Some bettors may mistake sportsbooks for investment platforms. Others may continue adding funds to chase big wins. These are the beginnings of gambling problems, but they are nothing compared to the damage wrought by gambling addictions. 

Balancing an engaging sports betting industry with the specter of problem gambling and gambling addiction is challenging. However, Arizona has ensured that problem gambling resources are funded for those who need them. Arizona’s updated tribal gaming compact includes funding for the Division of Problem Gambling. However, the decisions Arizona voters and former Governor Jane Dee Hull made in the early 2000s paved the way for a safer sports betting industry today. 

Arizona Sports Betting’s Economic Impact 

Arizona sports betting won’t power Arizona’s economy. HB 2772’s fiscal note estimated that Arizona sports betting would generate $15.2 million in tax revenue. All that money will go to Arizona’s $11.9 billion general fund. However, $15 million is a barely noticeable addition to a fund that large. 

“I suppose $15 million is better than nothing if prior to the compact [updated tribal gaming compact] folks were using out-of-country sportsbooks,” ASU economics professor Dennis Hoffman wrote in an email to Arizona Casinos. “Also, availability of sports betting in Arizona may reduce leakages from trips to Vegas. But [it’s] hard to know that number and whether it is big at all.”

So, Arizona sports betting could exceed its projected revenue by recapturing revenue that it has lost to Las Vegas and other sports betting markets. Colorado has legalized online sports betting, and it’s on Arizona’s northern border. So, anyone in northern Arizona could’ve driven across Colorado’s southern border to place legal mobile sports wagers. This is yet another leak that legalized sports betting in Arizona could plug. 

However, the proof will be in the real numbers and the financial estimates that Arizona’s Division of Gaming periodically releases. Those figures will reveal whether bettors who choose to bet in Arizona instead of traveling abroad are a source of income that’s remained unaccounted for in previous estimates.    

Responsible Gaming In Arizona

Sports betting won’t be a major revenue driver for Arizona. However, sports bettors will get critical consumer protections that are unavailable at unlicensed sportsbooks. Arizona’s Department of Gaming’s Public Information Officer, Maxwell Hartgraves, offered three good reasons to legalize sports betting. The first is consumer protections, like the cash reserve requirement that ensure sportsbooks keep enough cash on hand to pay winnings. The second is the modest amount of tax revenue. But the third reason is the most important.   

“Third and likely one of the most important is the responsible gaming and problem gambling requirements we can put into rule and statute and get treatment for those who may struggle with gambling generally speaking,” Hartgraves said.

Responsible gaming encompasses some of the most important safeguards that sportsbooks have in place for problem gamblers and gambling addicts. They include features like limiting bets, limiting time spent on a sportsbook, and even self-excluding. Self-exclusion allows bettors to lock themselves out of their sportsbook accounts for months or years at a time. So, bettors who struggle to resist the temptation to bet can keep themselves from accessing their sportsbook accounts. Since sportsbooks are tied to each bettor’s identity, self-exclusion is an effective intervention for problem gambling or gambling addiction.   

Responsible Gaming Funding In Arizona 

On top of Arizona sportsbooks’ responsible gaming options, Arizona’s Division of Problem Gambling offers important resources for problem gamblers and gambling addicts. For example, Arizona’s Division of Problem Gambling has a treatment number that connects problem gamblers with treatment options. The Division also has a program to train problem gambling counselors. Those programs cost money, and Arizona has a steady stream of funding for them. 

“Our Division of Problem Gambling, which is encompassed within The Department of Gaming, is funded through tribal contributions,” Hartgraves said. 

How Arizona’s Tribes Fund Problem Gambling Programs

In 2002, Arizona voted to allow the Governor to negotiate tribal gaming compacts with each state’s tribe. Proposition 202 resolved a conflict from a lawsuit brought by the horse racing industry that was preventing the Governor from renewing tribal gaming compacts that were set to expire. 

Part of this bill included a provision that 2% of annual tribal contributions to the State would fund problem gambling resources. Arizona’s tribal gaming compact was written and agreed upon the following year to reflect the terms of the 2002 ballot initiative. So, tribal gaming has funded problem gambling interventions in Arizona for decades. 

During the most recent fiscal year, tribal gaming contributed $97 million to the State of Arizona. $1.9 million went to problem gambling programs provided by the Division of Problem Gambling. In a sports betting industry that could see $155 million in sportsbook revenue, that’s well over the National Council on Problem Gambling’s (NCPG) recommendation for problem gambling funding. The NCPG recommends that 1% of sports betting revenue goes toward funding problem gambling programs. Based on Arizona’s tribal gaming revenues, Arizona seems well-positioned to maintain that reliable level of funding. 

“Since State fiscal year 2016, the total tribal contributions to the state and its cities, towns, and counties have eclipsed the $100 million dollar mark each year,” Hartgraves wrote in an email to Arizona Casinos. So, Arizona’s previous year of tribal contributions isn’t a one-off year. It’s a steady stream of revenue that will fund some of the most important government programs in the gambling industry. 

Arizona’s Sports Betting Ecosystem 

Arizona was prepared for a healthy sports betting industry with robust consumer protections. Sportsbooks were required to offer interventions for problem gamblers, like the national problem gambling helpline, account limits, and self-exclusion. 

However, state agencies took responsibility for responsible gaming, too. Arizona’s Division of Problem Gambling trains gambling counselors and connects problem gamblers and gambling addicts with help. It can do this because of the tribal contributions that fund various programs, including problem gambling intervention.

Arizona’s approach to problem gambling funding stands in stark contrast to neighbors like Colorado. Colorado only budgeted $130,000 for addressing problem gambling in its sports betting bill. It’s far too little for an industry that generated just under $66 million in sportsbook revenue in its first full year. That’s why Arizona seems so well-positioned to address problem gambling compared to some surrounding markets.     

The responsibility for promoting responsible gaming lies with more parties than sportsbooks and lawmakers. Local regulators, media outlets, and major sports franchises have important platforms and their own forms of power to educate bettors about responsible gaming. Arizona’s government and sportsbooks have done their part to generate revenue and protect bettors. However, the responsibility for responsible gaming lies with everyone involved in the sports betting ecosystem.   

About the Author

Christopher Gerlacher

Christopher Gerlacher is a writer tucked into the foothills of Colorado Springs, Colorado.