Arizona Law Makes Taking Account Bets a Felony

Account wagering companies no longer are accepting wagers from Arizona residents due to a law that took effect Sept. 19. Violation of the law is a class six felony, which could mean jail time.

Account wagering companies no longer are accepting wagers from Arizona residents due to a law that took effect Sept. 19.

Under House Bill 2694, any individual outside of a licensed racetrack or off-track betting facility that accepts a wager or bets on the results of a race is guilty of a class six felony, which can bring imprisonment.

HB2694 amends section 5-112 of the Arizona Revised Statutes, which provide the guidelines for pari-mutuel wagering on the results of races and regulated simulcasts. Buying, selling, cashing, exchanging, or acquiring a financial interest in a pari-mutuel ticket are all considered to be accepting a wager or betting on the results of a race.

Many representatives of the Arizona horse racing industry offered their support for HB2694 during a Feb. 15 state Committee on Water and Agriculture meeting. Among the supporters were representatives of Turf Paradise, Yavapai Downs, the Yavapai Downs County Fair Association, the Arizona Horsemen’s Benevolent and Protective Association, and the Arizona Thoroughbred Breeders Association.

Account wagering, also known as advance deposit wagering, was never legalized in Arizona, which prevented Arizona racetracks from negotiating with ADW companies. Despite a lack of explicit legal consent, ADW companies still accepted bets from Arizona residents while contributing no revenue to Arizona racetracks or to purse accounts, except host-track fees on Turf Paradise and Yavapai Downs races.

With HB2694 now in effect, the ADW companies were forced to close the accounts of their Arizona customers or face felony charges.

“It was already in the law that you couldn’t do account wagering,” said Jerry Simms, owner of Turf Paradise in Phoenix. “(HB2694) puts teeth into it.”

The suspension of account wagering has upset Arizona horseplayers who held wagering accounts. Some members of the forum Web site, including those that live outside the state of Arizona, have pledged to boycott Arizona racetracks that supported HB2694.

Randy Fozzard, racing manager for Yavapai Downs in Prescott Valley, said he hopes account wagering will return to Arizona, albeit under a new model.

“I wish that ADW was legal in Arizona, and I wish that the model could operate where source-market fees are paid to the tracks, like in California, New York, Kentucky, or other states,” Fozzard said.

ADW companies were operating in Arizona, unscathed by any regulation, but were willing to pay source-market fees to tracks, Fozzard said.

“But our state has a law that says only wagers can be accepted at the racetrack enclosure or at an off-track betting site,” he said. “We weren’t allowed to participate with the ADW companies in receiving source-market fees, but they were unimpeded in their ability to (accept wagers from Arizona customers).”, an ADW company, expressed its opinion of HB2694 in an e-mail sent to its Arizona customers, describing the law as “clearly unlawful, unconstitutional, and protectionist.” According to the e-mail, is “reviewing the situation with its attorneys.”

Should any ADW company challenge HB2694 in court, it could possibly contend that a wager made through an ADW that operates outside of Arizona is made in the hub state, and therefore not subject to restriction under Arizona law. To date, no judge has ruled on whether such a bet is considered to be made where the account-holder legally resides, where the ADW company’s hub is located, or where the track is located.

Fozzard said Arizona racetracks previously supported legislation that would have legalized ADW and therefore allowed the racetracks to negotiate with ADW companies.

“We tried to pass a law that would allow ADW where we could receive source-market fees,” Fozzard said. “There’s an 800-pound gorilla in Arizona--the Indian tribes--whose interests the legislature will protect. We had absolutely zero hope of passing the ADW bill. What can’t happen is where (ADW companies accept wagers) but aren’t allowed to pay us.”