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A Maricopa County Superior Court judge on Monday ruled against an Arizona tribe that sued in hopes of stopping sportsbooks in Arizona from taking bets on Thursday as planned.
The Yavapai-Prescott Indian Tribe sued the director of the Department of Gaming and Gov. Doug Ducey, arguing that the legislation passed this year enacting sports betting was not constitutional because it violates Proposition 202 passed in 2002 regarding tribal gaming laws.
“Today’s ruling is not just a win in court, but a win for Arizona,” said Ducey spokesman C. J. Karamargin. “The legislation and compacts signed by Gov. Ducey in April were the culmination of a multi-year effort to modernize an industry that has become a critical component of the state’s growing economy. This ruling affirms that, and we could not be more pleased with this outcome.”
The tribe, which is likely to appeal the decision, contends that the sports-betting law violates Arizona’s Voter Protection Act, which prevents the Arizona Legislature from amending a voter initiative unless it furthers the purpose of that initiative.
The tribe’s argument is that voters in 2002 approved a ballot measure that set out the types of gambling allowed in Arizona and therefore only voters can decide whether to expand the types of gambling offered in the state.
Tribe says introduction of sports betting will harm tribe’s business
“How you can say that (the intent of) Proposition 202 has not … been undone here, when it exorbitantly expands gaming in the state of Arizona not only within reservations but off it. It is very strange to me and is not right,” said Nicole Simmons, a lawyer for the tribe, during an emergency hearing in the case Monday.
Judge James Smith held the hearing at 9 a.m. on Labor Day to address the issue quickly because of the planned launch Thursday of sports betting. He said he would get his decision out on the holiday because an appeal is almost guaranteed by the losing side.
Smith’s 12-page decision said the tribe’s arguments were not likely to succeed, so he denied the motion to put the brakes on sports betting.
“The Tribe bears the burden of showing (the law’s) unconstitutionality,” Smith wrote. “The court presumes the statute is constitutional, will uphold it unless it clearly is not, and prefers interpretations favoring constitutionality.
The Yavapai-Prescott Indian Tribe, which runs the Bucky’s and Yavapai casinos near Prescott, was one of two tribes that did not sign new gaming compacts with the state earlier this year as part of a negotiation with Ducey.
The new compacts allowed the tribes to expand their casinos and offer new table games like baccarat and craps. The changes were tied to House Bill 2772, allowing professional sports teams and tribes to offer mobile sports betting off the reservations, as well as books at sports venues.
But tribes that didn’t sign the gaming compact were not eligible to apply for mobile sportsbook licenses.
The Yavapai-Prescott argument says that harming the tribe’s business threatens critical services the tribe offers for its members, such as drinking water and education.
Department of Gaming lawyer: state will lose ‘millions per month’ if sports betting delayed
Patrick Irvine, a lawyer representing the director of the Arizona Department of Gaming, urged the judge not to delay the launch of sports betting.
“The applicants, licensees have all put in incredible amounts of effort. If you listen to the radio when you drive you’ve probably heard advertisements for them,” Irvine said
He said the state will lose “millions per month” in revenue if sports betting is delayed.
“There is quantifiable, identifiable, certain harm that will occur if there is a delay to the start date,” Irvine said.
He also questioned whether the tribe would actually be harmed by the launch of sports betting.
“They are asking you to treat HB 2772 as though it set their casinos on fire,” he said.
Smith asked if the tribe had calculated how much money its casinos might lose should sports betting launch as anticipated this week, and the tribe’s lawyer said it was difficult to calculate because it is difficult to compare the different gambling arrangements in other states with the law Arizona passed.
“Arizona has taken a very, very large step here,” Simmons said.
Smith seemed particularly interested in the defendants’ argument that Proposition 202 contemplated future gambling expansions, as there is language in that ballot measure that addresses what the tribes will pay to the state should gambling laws change.
Simmons said that such language in Proposition 202 doesn’t mean the legislature could simply change the gambling laws though because the laws were set by voters.
“In order to expand these specific and enumerated forms of gaming in Prop. 202, they would have to put it out to voter approval,” she said.
Simmons also questioned why the legislation was rushed.
“There was no reason to enact House Bill 2772 on an emergency basis simply to make football season,” she said. “That’s the reality here, right, we are rushing to make sure we get in front of football season and make a ton more money. So no, it’s not an emergency to make a ton more money. But it is an emergency to start competition and take away money from (the tribe’s) critical services.”
Two Arizona tribes oppose Prescott tribe’s position
The Tonto Apache Tribe of Arizona, which runs a casino near Payson, and the Quechan Tribe of the Fort Yuma Indian Reservation, filed to intervene in the case and oppose the Prescott tribe’s position.
The Tonto Apache and Quechan tribes are among the 10 that won licenses from the Department of Gaming to offer mobile sports betting.
They said in court documents that the Yavapai-Prescott lawsuit threatens to financially harm their members.
“The Tonto Apache and the Quechan, in pursuing their good-faith negotiations with the State of Arizona over the course of five years, have both expended significant time, efforts, and resources to achieving the benefits derived under the 2021 Compact Amendment,” they said in court documents.
Tonto Apache Chairman Calvin Johnson said in a court declaration that the Yavapai-Prescott’s plan for years has been to not participate in discussions over the gaming agreements and to sue if it didn’t agree with the deal the governor and tribes cut.
He described a 2017 meeting with the Yavapai-Prescott lawyer Luis Ochoa.
“Attorney Ochoa added that in the event other tribes successfully reached a compact amendment with the State and if (Yavapai-Prescott Indian Tribe) did not like what was negotiated by the other tribes participating in those compact amendment negotiations (Yavapai-Prescott Indian Tribe) would then simply sue the state,” his declaration said.
Ochoa did not immediately respond to a request for comment Monday evening after the decision came out.
Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.
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