SB1458 - 552R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 5-101, Arizona Revised Statutes, is amended to read:

START_STATUTE5-101. Definitions

In this article, unless the context otherwise requires:

1. "Additional wagering facility" means a facility that is not the enclosure in which authorized racing takes place but that meets the requirements of section 5-111, subsection A and is used by a permittee for handling pari-mutuel wagering.

2. "Advance deposit wagering" means a form of pari-mutuel wagering that allows a person to deposit monies in advance in an account with an advance deposit provider and use the monies to pay for pari-mutuel wagering on live or simulcast racing that the advance deposit pari-mutuel wagering permittee accepts or makes.

3. "Advance deposit wagering provider" means a betting system or multijurisdictional wagering provider that is authorized to conduct advance deposit wagering pursuant to this article.

4. "Applicant" means a person, partnership, association or corporation placing before the department an application for a permit or license.

5. "Association" means a body of persons, corporations, partnerships or associations, united and acting together without a charter from the state for the prosecution of some common enterprise.

6. "Commercial horse racing" means horse racing conducted other than by a county fair association.

7. "Commission" means the Arizona racing gaming commission.

8. "Concessionaire" means a person, partnership, association or corporation that offers goods or services for sale to the public, a permittee or a licensee at an enclosure in which authorized racing takes place or an additional wagering facility.

9. "County fair facility" means any place, enclosure or track constructed in accordance with a permit issued by the commission for the purpose of running county fair horse racing dates as well as any commercial dates for horse racing that may be awarded by the commission in reference to the location.

10. "County fair racing association" means an association duly authorized by the board of supervisors to conduct a county fair racing meeting for the benefit of the county.

11. "Dark day simulcast" means a simulcast received on a day when there are no posted races conducted at the enclosure in which authorized racing takes place.

12. "Department" means the department of gaming Arizona gaming commission.

13. "Desensitized" means that a horse's legs on arrival at the receiving barn or saddling paddock do not respond appropriately to tests for feeling administered by an official veterinarian.

14. "Director" means the director of the department of gaming commission.

15. "Dog racing" means racing in which greyhound dogs chase a mechanical lure.

16. "Entered" means that a horse or dog has been registered with an authorized racing official as a participant in a specified race and has not been withdrawn prior to before presentation of the horse or dog for inspection and testing as provided in section 5-105.

17. "Financial interest" means any direct pecuniary interest.

18. "Firm" means a business unit or enterprise that transacts business.

19. "Handle" means the total amount of money contributed to all pari-mutuel pools by bettors.

20. "Harness racing" means horse racing in which the horses are harnessed to a sulky, carriage or similar vehicle and driven by a driver.

21. "Horse racing" means racing in which horses are mounted and ridden by jockeys. For purposes of county fair racing meetings, "horse racing" means racing in which horses or mules are mounted and ridden by jockeys.

22. "License" means the license issued by the department to each employee or other person participating in any capacity in a racing meeting, including officials and employees of the pari-mutuel department.

23. "Pari-mutuel wagering" means a system of betting that provides for the distribution among the winning patrons of at least the total amount wagered less minus the amount withheld under state law.

24. "Permit" means a permit for a racing meeting issued under this article.

25. "Racing meeting" means a number of days of racing allotted by the commission in one permit.

26. "Simulcast" means the telecast shown within this state of live audio and visual signals of horse, harness or dog races conducted at an out-of-state track or the telecast shown outside this state of live audio and visual signals of horse or harness races originating within this state for the purpose of pari-mutuel wagering.

27. "Source market fee" means the fee that an advance deposit wagering provider pays to a commercial permittee in the state where the advance deposit wagering customer resides.

28. "Telephone" means any device that a person uses for voice communications in connection with the services of a telephone company.

29. "Unauthorized racing meeting" means any racing meeting conducted outside the bounds of a permit.

30. "Undesirable" includes known bookmakers, touts, persons convicted of a violation of this article or of any law prohibiting bookmaking or any other illegal forms of wagering, or any other person whose presence would, in the opinion of the director, be inimical to the interests of the state.

31. "Week" means seven consecutive days beginning on Monday and ending on Sunday, mountain standard time. END_STATUTE

Sec. 2. Section 5-221, Arizona Revised Statutes, is amended to read:

START_STATUTE5-221. Definitions

In this article, unless the context otherwise requires:

1. "Boxing":

(a) Means the act of attack and defense with the fists, using padded gloves, that is practiced as a sport. Where applicable, boxing

(b) Includes kickboxing, where applicable.

2. "Commission" means the Arizona state boxing and mixed martial arts gaming commission.

3. "Contest" means any boxing or mixed martial arts bout, event, contest, match or exhibition between two persons.

4. "Department" means the department of gaming commission.

5. "Director" means the director of the department of gaming commission.

6. "Executive director" means the executive director of the commission.

7. 6. "Kickboxing" means a form of boxing, including muay thai pursuant to rules and regulations of the United States muay thai association or another muay thai sanctioning body that is approved by the commission, in which blows are delivered with any part of the arm below the shoulder, including the hand, and any part of the leg below the hip, including the foot.

8. 7. "Mixed martial arts" means any form of competition or contest, other than boxing or kickboxing, in which blows are delivered and in which the competitors use any combination of tactics including boxing, wrestling, striking, kicking, martial arts and submission techniques.

9. 8. "Professional" means any person who competes for any money prize or a prize that exceeds the value of thirty-five dollars $35 or teaches or pursues or assists in the practice of boxing or mixed martial arts as a means of obtaining a livelihood or pecuniary gain.

10. 9. "Tough man contest":

(a) Means any boxing match consisting of one minute rounds, between two or more persons who use their hands, wearing padded gloves that weigh at least twelve ounces, or their feet, or both, in any manner. Tough man contest

(b) Does not include kickboxing or any recognized martial arts competition. END_STATUTE

Sec. 3. Title 5, Arizona Revised Statutes, is amended by adding chapter 5, to read:

CHAPTER 5

ARIZONA GAMING COMMISSION

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE5-421. Arizona gaming commission; qualifications; membership; appointment; terms; powers and duties; definition

A. the arizona gaming commission is established consisting of the following members, who shall be citizens of the United States and residents of this state:

1. One member shall be a certified public accountant licensed by this state or another state and having at least five years of experience in general accounting, principles and practice of corporate finance, general finance, gaming or economics, appointed by the governor.

2. One member with at least five years of experience in law enforcement, appointed by the governor.

3. the director of the commission, who shall have at least five years of experience in public or business administration.

4. Three public members, one appointed by the governor, one appointed by the president of the senate and one appointed by the Speaker of the house of representatives.

B. The governor shall appoint the director pursuant to section 38-211.

C. initial terms of the members shall be as follows:

1. The initial terms of the members appointed by the governor shall expire in staggered years beginning on the last monday in JANUARY 2025, the last monday in january 2026 and the last monday in january 2027.

2. the INITIAL terms of the members appointed by the president of the senate and the speaker of the house of representatives shall expire on the last monday in january 2026.

3. After the initial terms, each member shall be appointed for a four-year term.

D. The governor may remove Any member of the commission for cause.

E. any member of the commission may be removed by a vote of a majority of the members of the commission without cause.

F. before entering on the discharge of the appointee's duties, each member shall take the official oath.

G. members of the commission are eligible to receive compensation pursuant to section 38-611 for each day spent in the discharge of their duties and reimbursement for all expenses necessarily and properly incurred in attending a meeting of or for the commission, including mileage expenses.

H. a person who has a financial interest, either directly or indirectly, in gaming is not qualified for membership on the commission, appointment to the commission or employment by the commission.

i. a person who holds elected office in this state or any officer or official of a POLITICAL party or political convention are not qualified for membership on the commission, appointment to the commission or employment by the commission.

J. the commission shall meet at the discretion of the commission. A majority of the commission members constitute a quorum.

K. THe commission shall have an office located in Phoenix and may maintain an office in Tucson. On request of the commission, an agency of this state or a political subdivision of this state shall provide the commission with its services, equipment, documents, personnel and facilities to the extent possible without cost to the commission.

L. the commission shall:

1. assume all the powers and duties of the Arizona racing commission, the Arizona state boxing and mixed martial arts commission and the department of gaming.

2. enforce all rules adopted relating to gaming.

3. Ensure the continued growth and success of gaming in this state by establishing public confidence.

4. Regulate the location, practice, association and activities relating to the operation of licensed gaming establishments and the manufacture, sale or distribution of gaming devices and associated equipment.

5. License all establishments where gaming is conducted and where gaming devices are operated to protect the public health, safety, order and general welfare of residents of the state of arizona

M. for the purposes of this section, "gaming" means all racing, boxing, kickboxing, mixed martial arts, gambling on indian reservations, fantasy sports contests and event wagering conducted in this state. END_STATUTE

Sec. 4. Repeal

Sections 5-601, 5-602, 5-602.01, 5-603 and 5-604, Arizona Revised Statutes, are repealed.

Sec. 5. Section 5-1201, Arizona Revised Statutes, is amended to read:

START_STATUTE5-1201. Definitions

In this chapter, unless the context otherwise requires:

1. "Applicant" means any person that has applied for a license as a fantasy sports contest operator or that has been approved for any act related to fantasy sports contests.

2. "Application" means a request to issue a license as a fantasy sports contest operator or to approve any act related to fantasy sports contests.

3. "Athletic event":

(a) Means a real-world professional, collegiate or nationally recognized sports game, contest or competition that involves the physical exertion and skill of the participating individual athletes who are each physically present at the location in which the sports game, contest or competition occurs, and the outcome of the sports game, contest or competition is directly dependent on the performance of the participating athletes.

(b) Includes events involving motor vehicles.

4. "Department" means the department of gaming arizona gaming commission.

5. "Entry fee" means cash or a cash equivalent that is paid by a participant to a fantasy sports contest operator to participate in a fantasy sports contest.

6. "Fantasy sports contest" means a simulated game or contest that is offered to the public with an entry fee and that meets all of the following conditions:

(a) No fantasy sports contest team is composed of the entire roster of a real-world sports team.

(b) No fantasy sports contest team is composed entirely of individual athletes who are members of the same real-world sports team.

(c) Each prize or award or the value of all prizes or awards offered to winning fantasy sports contest players is made known to the fantasy sports contest players in advance of the fantasy sports contest.

(d) Each winning outcome reflects the relative knowledge and skill of the fantasy sports contest players and is determined by the aggregated statistical results of the performance of multiple individual athletes or participants selected by the fantasy sports contest player to form the fantasy sports contest team, whose individual performances in the fantasy sports contest directly correspond with the actual performance of those athletes or participants in the athletic events in which those individual athletes or participants participated.

(e) A winning outcome is not based on randomized or historical events or on the score, point spread or performance in an athletic event of a single real-world sports team, a single athlete or any combination of real-world sports teams.

(f) The fantasy sports contest does not constitute or involve and is not based on any of the following:

(i) Racing that involves animals.

(ii) A game or contest ordinarily offered by a horse track or casino for money, credit or any representative of value, including any races, games or contests that involve horses or that are played with cards or dice.

(iii) A slot machine or other mechanical, electromechanical or electronic device, equipment or machine.

(iv) Poker, blackjack, faro, monte, keno, bingo, fan-tan, twenty-one, seven and a half, klondike, craps, chuck-a-luck, Chinese chuck-a-luck, wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingue, roulette or other banking or percentage games.

(v) Any other game or device that is authorized or that is not authorized by this state.

(vi) A high school or youth sporting event or any event that is not an athletic event.

(vii) A contest that involves or results in betting on a race, a game, a contest or a sport that constitutes event wagering as defined in section 5-1301.

7. "Fantasy sports contest adjusted revenues" means the amount equal to the total of all entry fees that a fantasy sports contest operator collects from all fantasy sports contest players minus the total of all sums paid out as prizes or awards to all fantasy sports contest players, multiplied by the in-state percentage.

8. "Fantasy sports contest operator" or "operator" means a person that is engaged in the business of professionally conducting paid fantasy sports contests for cash or other prizes or awards for members of the general public that requires cash or cash equivalent as an entry fee to be paid by a member of the general public who participates in a paid fantasy sports contest.

9. "Fantasy sports contest platform" means the hardware, software, firmware, communications technology or other equipment, including operator procedures implemented to allow player participation in digital or online fantasy sports contests, and if supported, the corresponding equipment related to the display of the outcomes, and other similar information necessary to facilitate player participation in which a player is provided with the means to establish a player account and the fantasy sports contest operator is provided with the means to review player accounts, suspend fantasy sports contests, generate various financial transaction and account reports, input outcomes for fantasy sports contests and set any configurable parameters.

10. "Fantasy sports contest player" or "player" means an individual who participates in a fantasy sports contest offered by a fantasy sports contest operator.

11. "Fantasy sports contest team" means the simulated team composed of multiple individual athletes, each of whom is a member of a real-world sports team that a fantasy sports contest player selects to compete in a fantasy sports contest.

12. "Highly experienced player" means a fantasy sports contest player who has done at least one of the following:

(a) Entered more than one thousand fantasy sports contests offered by a single fantasy sports contest operator.

(b) Won more than three prizes or awards valued at $1,000 each or more from a single fantasy sports contest operator.

13. "Holding company" means a corporation, firm, partnership, limited partnership, limited liability company, trust or other form of business organization that is not an individual and that directly or indirectly does either of the following:

(a) Holds an ownership interest of ten percent or more, as determined by the holding company's board, in a fantasy sports contest operator.

(b) Holds voting rights with the power to vote ten percent or more of the outstanding voting rights of a fantasy sports contest operator.

14. "In-state percentage" means, for each fantasy sports contest, the percentage, rounded to the nearest tenth of a percent, equal to the total entry fees collected from all in-state participants divided by the total entry fees collected from all participants in the fantasy sports contest, unless otherwise prescribed by the department.

15. "Key employee" means an employee of a fantasy sports contest operator who has the power to exercise significant influence over decisions concerning the fantasy sports contest operator.

16. "License" means an approval that is issued by the department to any person or entity to be involved in a fantasy sports operation.

17. "Management company" means a person retained by a fantasy sports contest operator to manage a fantasy sports contest platform and provide general administration and other operational services.

18. "Person" means an individual, partnership, corporation, association, limited liability company, federally recognized Indian tribe or other legal entity.

19. "Player account" means an account that is established by a patron for the purpose of participating in fantasy sports contests, including deposits, withdrawals, entry fees and payouts.

20. "Prize or award" means anything of value or any amount of cash or cash equivalents.

21. "Protected information" means information related to playing fantasy sports contests by a fantasy sports contest player that is not readily available to the general public and that is obtained as a result of a person's employment in relation to a fantasy sports contest.

22. "Script" means a list of commands that a fantasy sports contest-related computer program can execute and that is created by a fantasy sports contest player or by a third party for a fantasy sports contest player to automate processes on a fantasy sports contest platform. END_STATUTE

Sec. 6. Section 5-1301, Arizona Revised Statutes, is amended to read:

START_STATUTE5-1301. Definitions

In this chapter, unless the context otherwise requires:

1. "Adjusted gross event wagering receipts" means an event wagering operator's gross wagering receipts, excluding voided bets, minus winnings paid to authorized participants and any federal excise tax. A deduction from adjusted gross event wagering receipts equal to the value of free bets or promotional credits redeemed by authorized participants may be taken as provided in this paragraph. The deduction under this paragraph for free bets or promotional credits is limited to the first five years following the effective date of this section April 15, 2021 as follows:

(a) For years one and two, a deduction not to exceed twenty percent of an event wagering operator's gross wagering receipts.

(b) For year three, a deduction not to exceed fifteen percent of an event wagering operator's gross wagering receipts.

(c) For years four and five, a deduction not to exceed ten percent of an event wagering operator's gross wagering receipts.

(d) For year six and each year thereafter, a deduction of free bets is not allowed. January 1 following the year in which the event wagering operator begins event wagering operations is considered the first year of event wagering for the purposes of this paragraph. An event wagering operator may deduct up to twenty percent of an event wagering operator's gross wagering receipts during any period that the operator conducts event wagering before January 1 of the first year of event wagering operations.

2. "Department" means the department of gaming Arizona gaming commission.

3. "E-sport event" means an organized, multiplayer video game competition, particularly between professional players, individually or as teams.

4. "Event wagering":

(a) Means accepting wagers on sports events or other events, portions of sports events or other events, the individual performance statistics of athletes in a sports event or combination of sports events or the individual performance of individuals in other events or a combination of other events by any system or method of wagering, including in person or over the Internet through websites and on mobile devices.

(b) Does not include a fantasy sports contest as defined in section 5-1201.

5. "Event wagering employee" means an employee of an event wagering operator, sports facility, management services provider or limited event wagering operator who is directly involved in the management or control of the conduct of event wagering under this chapter in this state.

6. "Event wagering facility" means a facility at which event wagering is conducted under this chapter.

7. "Event wagering operator" means either:

(a) An owner or operator of an Arizona professional sports team or franchise, an operator of a sports facility in this state that hosts an annual tournament on the PGA tour or a promoter of a national association for stock car auto racing national touring race in this state, or the designee of such an owner, operator or promoter, who is licensed to offer event wagering under this chapter. If an owner, operator or promoter that qualified for an event wagering operator license appoints a designee, the designee will be considered the event wagering operator and the licensee with respect to the applicable license for the purposes of this chapter.

(b) An Arizona Indian tribe or an entity fully owned by an Arizona Indian tribe, or its designee, licensed to operate only mobile event wagering outside the boundaries of its Indian lands and throughout this state if it has signed the most recent tribal-state gaming compact and any applicable appendices or amendments. If an Indian tribe that qualified for an event wagering operator license appoints a designee, the designee will be considered the event wagering operator and the licensee with respect to the applicable license for the purposes of this chapter.

10. 8. "Licensee" means a person that holds an event wagering operator license, limited event wagering license, supplier license or management services provider license.

8. 9. "Limited event wagering operator" means a racetrack enclosure or additional wagering facility that holds a permit issued by the division of racing to offer wagers on horseracing and that is licensed under this chapter.

11. 10. "Management services provider" means a person that operates, manages or controls event wagering authorized by this chapter on behalf of an event wagering operator or limited event wagering operator, including developing or operating event wagering platforms and providing odds, lines and global risk management, and may provide services to more than one licensed event wagering operator or licensed limited event wagering operator.

9. 11. "Official league data" means statistics, results, outcomes and other data related to a sports event or other event obtained pursuant to an agreement with the relevant sports governing body or an entity expressly authorized by the sports governing body to provide such information to licensees that authorizes the use of such data for determining the outcome of sports wagers on sports events or other events.

12. "Other event" means a competition of relative skill or an event authorized by the department under this chapter.

13. "Person" means an individual, partnership, committee, association, corporation, or Indian tribe or an entity fully owned by an Indian tribe, or any other organization or group of persons.

14. "Professional sport" means a sport conducted at the highest level league or organizational play for its respective sport and includes baseball, basketball, football, golf, hockey, soccer and motorsports.

15. "Prohibited conduct" includes any statement, action or other communication intended to unlawfully influence, manipulate or control a betting outcome of a sports event or other event of any individual occurrence or performance in a sports event or other event in exchange for financial gain or to avoid financial or physical harm.

16. "Prohibited participant" means:

(a) Any individual whose participation may undermine the integrity of the wagering, the sports event or the other event.

(b) Any individual who is prohibited from placing a wager as an agent, proxy or because of self-exclusion.

(c) Any individual who is an athlete, coach, referee, player, trainer or personnel of a sports organization in any sports event or other event overseen by that individual's sports organization who, based on information that is not publicly available, has the ability to determine or to unlawfully influence the outcome of a wager.

(d) An individual who holds a position of authority or influence sufficient to exert influence over the participants in a sporting contest, including coaches, managers, handlers and athletic trainers, such that their actions can affect the outcome of a wager.

(e) An individual with access to exclusive information on any sports event or other event overseen by that individual's sports governing body that is not publicly available information or any individual identified by any lists provided by the sports governing body to the Department.

17. "Sports event" means a professional sport or athletic event, a collegiate sport or athletic event, a motor race event, an e-sport event or an olympic event.

18. "Sports facility" means a facility that is owned by a commercial, state or local government or quasi-governmental entity that hosts professional sports events and that holds a seating capacity of more than ten thousand persons at its primary facility, one location in this state that hosts an annual golf tournament on the PGA tour and one location that holds an outdoor motorsports facility that hosts a national association for stock car auto racing national touring race.

19. "Sports governing body" means an organization headquartered in the United States that prescribes final rules and enforces codes of conduct with respect to a sports event and participants in a sports event.

22. 20. "Supplier" means a person that manufactures, distributes or supplies event wagering equipment or software, including event wagering systems.

20. 21. "Tier one sports wager" means a sports wager that is determined solely by the final score or final outcome of the sports event and that is placed before the sports event has begun.

21. 22. "Tier two sports wager" means a sports wager that is not a tier one sports wager.

23. "Wager":

(a) Means a sum of money or thing of value risked on an uncertain occurrence.

(b) Includes tier one and tier two sports wagers, single-game bets, teaser bets, parlays, over-under bets, moneyline bets, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, straight bets and other wagers approved by the department. END_STATUTE

Sec. 7. Repeal

Sections 41-3024.28, 41-3026.04 and 41-3026.22, Arizona Revised Statutes, are repealed.

Sec. 8. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3032.01, to read:

START_STATUTE41-3032.01. Arizona gaming commission; termination July 1, 2032

A. The arizona gaming commission terminates on July 1, 2032.

b. Title 5, chapters 1, 2 and 5 and this section are repealed on January 1, 2033. END_STATUTE

Sec. 9. Purpose

Pursuant to section 41-2955, subsection E, Arizona Revised Statutes, the legislature establishes the Arizona gaming commission to regulate and promote gaming.

Sec. 10. Transferring powers

The Arizona gaming commission succeeds to the powers and duties of the following:

1. The Arizona racing commission.

2. The Arizona state boxing and mixed martial arts commission.

3. The department of gaming.

Sec. 11. Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration in the fifth-sixth legislature, first regular session.

Sec. 12. Effective date

This act is effective from and after June 30, 2023.