“If gambling is risking something of value, then of course it’s gambling,” says Jonathan Bales, a 30-year-old former NFL analyst from Philadelphia who now makes his living entirely in fantasy sports. “In the same way that crossing the street is gambling.”
Bales’ argument hits a nerve for Arizonans. The Grand Canyon state is one of only five U.S. states where it’s illegal to play fantasy sports for prizes through a third party – most notably, mega-million-dollar “daily fantasy sports” (DFS) giants FanDuel and DraftKings. That’s because Arizona law defines gambling as “giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill,” or betting on a future event, like a sports game (ARS 13-3301).
There’s just one problem: Some people really want to play.
Arizona Attorney General Mark Brnovich, formerly the head of the state’s Department of Gaming and currently the Co-Chair of the National Association of Attorneys General’s Gaming Committee, says the question of whether fantasy sports are contests of “skill” or “luck” is moot – Arizona law prohibits both. “If there’s any third party benefiting directly from the gambling, then it’s illegal,” he says.
That means DFS competition-hosting websites, which typically charge an entry fee or take a portion of the winnings, are a no-go. State Senator Adam Driggs (R-28) says that left some of his constituents upset. So he introduced an amendment during the last legislative session that would have legalized DFS in Arizona. It passed out of committee but was never heard on the Senate floor for a vote.
Daily Fantasy Sports Stats for 2015
$5.41: average entry fee cost
$700 million: amount paid out in prizes for
professional football bets
$1.68 billion: estimated amount paid out in
prizes for all sports
Source: superlobby.com
Driggs suspects it failed for a few reasons, including bad timing and the loss of their lawyer to a position on the Arizona Supreme Court. But the main obstacle, he says, was the reaction of the Native American Nations – not just their general opposition, but also their significant leverage: the gaming compact.
Under the current compact, the state agrees not to allow anyone but the nations to offer gambling. In return, the nations pay the state a portion of their casino revenues – upwards of $100 million per year. Tribal leaders and gaming experts said Driggs’ legislation would have triggered the “poison pill,” blowing up the compact and sparking an inevitable court challenge.
As a stopgap, Driggs had included in his bill the stipulation that if a court decided the legislation did nullify the gaming compact, it would never become law. Still, he says fantasy sports could benefit the nations. “They could probably figure out ways to make money with it,” he says. But he says it’s also possible the nations would want exclusive rights to fantasy sports to decrease the competition it would spark with outside entities.
He suspects the nations are holding onto fantasy sports as leverage for their next gaming compact, which will likely be renegotiated in nine years. “If you think about their interests, why would they give up something to negotiations now before those bigger negotiations even start?” Driggs says. (Calls to leaders of the Salt River Pima-Maricopa Indian Community and the Fort McDowell Yavapai Nation for comment weren’t returned.)
With Driggs’ decision not to run for re-election, his particular bill may be lost to the annals of history. But the idea isn’t. The torch was passed to Representative Jeff Weninger (R-17), who says he’s now exploring “the lay of the land.”
“For me it’s… an activity that in a free society, people should be able to do,” Weninger says of DFS. Still, he says, he won’t pursue anything that would endanger the gaming compact. “I have some ideas how we can approach it where it’s beneficial to everyone,” he says.
Right now he worries constituents may be gaming the system anyway. He says he’s heard of Arizonans registering on fantasy websites through out-of-state relatives to avoid suspicion, something Brnovich has been vigilant in trying to prevent. Last November, his office sent a letter to DraftKings asking site operators to disclose how they ensure Arizonans know playing fantasy sports through their sites is illegal. Their response was welcome: “They assured us they’re doing everything they can to make sure people in Arizona are not betting on these websites,” he says.
Bales has never tried to play from Arizona, but he says the sites don’t mess around when it comes to blacklisting would-be competitors from banned states. “They do, from what I’ve heard, a very good job with geo-location,” he says. “I don’t think you could just block your IP address and play.”
If Weninger is successful next session, wannabe players from Arizona won’t have to worry about that.
