PHOENIX — State lawmakers are moving to spell out that the “fantasy sports” leagues being advertised heavily on TV — and the wagering around them — is legal in Arizona, even as prosecutors in some other states are trying to close them down.
Current Arizona law makes it to illegal to spend money to participate in any game or contest of chance of skill. That includes betting on the outcome of a future event.
SB 1515 would specifically exclude “fantasy sports league competitions.”
Kelsey Lundy, who lobbies for the Fantasy Sports Trade Association, insisted that the legislation her group is pushing does not, in fact, legalize anything. Instead, she told the Senate Judiciary Committee on Thursday this simply seeks to clarify the law.
That, however, is not the conclusion of Attorney General Mark Brnovich.
In a letter to the chief executive of DraftKings, one of the fantasy league firms, Brnovich noted the company is soliciting players nationwide. But in the letter, Brnovich told Jason Robins that DraftKings is apparently failing to warn Arizonans they would be breaking the law by participating and collecting any winnings.
Fantasy sports is a kind of online game where players choose “virtual teams” of real players in a professional sport. Based on each of those players’ performances in actual games, the team accumulates points. Players win and lose money depending on the performance of their teams.
What at one time started as seasonal wagers have now exploded into daily games and payouts.
Lundy said Arizonans have been participating in online fantasy leagues since the early 1990s.
The problem, she said, is state law spells out exceptions from its ban on gambling, ranging from bingo nights at churches to the games of skill at places like Dave and Buster’s.
“But the law is silent on fantasy sports in Arizona, which has created this legal gray zone that my client would like to clarify,” Lundy said.
The contention that fantasy sports always has been legal is crucial to what happens even if the measure is approved by the Legislature and signed by the governor.
In 2002 the state signed a deal giving Indian tribes the exclusive right to operate certain kinds of gambling. That compact includes limits on types of gaming, the number of casinos and the number of machines.
More significant, that deal says if the state expands the kinds of gaming allowed off reservation it triggers a “poison pill” in that compact that eliminates any limits on what the tribes can do. And that also would absolve the tribes of any further obligation to share profits with the state. For the most recent budget year, that figure exceeds $88.4 million.
“The legislature has never considered fantasy sports league competitions to be a form of gambling,” reads the language approved Thursday by the committee.
But Valerie Spicer, executive director of the Indian Gaming Association of Arizona, said her members believe the law would trigger the “poison pill,” even with the legislative disclaimer.
