Background

Arizona has legal betting on the lottery, horse racing, and Class III tribal government casinos.

Tribal Casinos

Arizona Tribal-State Gaming Compacts took effect in 1993. In 2001, terms of the current Compacts with 21 Arizona Tribes were successfully negotiated for State regulation of approved Class III gaming activities on Tribal lands in Arizona. The Compacts (or agreements) contain detailed regulatory, technical, and internal control standards for the operation of Indian gaming. The Compacts last for ten years and can be renewed for one term of ten years and one additional term of three years.

The current Compact was passed by Arizona voters in the November 2002 election as Proposition 202, which is part of state law in Section 5-601.02 of the Arizona Revised Statutes. The Compact updated regulatory parameters for Class III gaming activities and required that the Tribes make monetary contributions to the State based on the net revenues received from gaming operations. The Proposition also authorized the State to enter into and maintain Tribal Compacts for up to 23 years.

Currently, 15 Tribes operate 22 Class III casinos. Another 6 Tribes do not have casinos but have slot machine rights they lease to other Tribes with casinos.

Tribal Contributions: Under the Compacts, Tribes with casinos contribute 1 to 8 percent of their gaming revenue each year to the State, and to cities, towns, and counties. The contribution is determined on a sliding scale based on the amount of gaming revenue.

12% distributed by the Tribe to the cities, towns and counties of their choosing for community services and public safety programs for local governments The remaining 88% of the Tribe’s total annual contribution goes to the Arizona Benefits Fund on a quarterly basis and provides funding for the Arizona Department of Gaming and the Office of Problem Gambling.

Lottery

Development: The Arizona lottery was created by a public referendum in 1980, with the first ticket sales in 1981. The lottery has subsequently been extended by the voters on three occasions.

Beneficiaries: By law, proceeds from the Arizona Lottery ticket sales go to programs and organizations in four specific state pillars — or areas — of focus that include a variety of beneficiaries. As of FY11, the four Arizona Lottery pillars are: economic and business development, education, environmental issues, and health and public welfare.

For more information see the Ariziona Lottery website.

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Total revenue is total ticket sales plus interest earned on the lottery fund balance and miscellaneous revenue sources . Prize liability is the total amount of prize money paid back to winners. Net Revenue is the total revenue minus vendor and retailer commissions and prize payouts and operating expenses; it is equal to "operating income." Prize and net revenue percentages are taken from the total revenues.

1949: Arizona Racing Commission established to oversee racing and pari-putuel wagering

1980: Voters pass a referendum approving the Arizona Lottery

1981: First ticket sales

1993: State/tribal compacts take effect, opening the door for Class III gaming on compacted tribal lands.

1997: Voters reauthorize the lottery for five more years

2002: Voters reauthorize the lottery for ten more years

2010: Legislators reauthorize the lottery through 2035.

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