SB1671 - 572R

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

Section 1. Section 5-101.01, Arizona Revised Statutes, is amended to read:

START_STATUTE5-101.01. Division of racing; director; qualifications; term; deputy director; conflict of interest

A. There is established a division of racing within the department of gaming.

B. The director shall administer the division. To be eligible for appointment as director, a person must have a minimum of five years of experience in business and administration and shall not have a financial interest in a racetrack or in the racing industry in this state during that person's appointment.

C. The director may establish the position of deputy director of the division.

D. The position of deputy director, if applicable, is exempt from title 41, chapter 4, articles 5 and 6. The deputy director, if applicable, is eligible to receive compensation pursuant to section 38-611.

E. The provisions of Title 38, chapter 3, article 8, relating to conflict of interest, apply applies to the director and all other employees of the department.

F. Neither the director, any employee of the department nor any member of the immediate family of the director or other employee of the department may:

1. Have any pecuniary interest in a racetrack in this state or in any stable, compound or farm licensed under this chapter.

2. Wager money at a racetrack enclosure or additional wagering facility in this state or wager money on the results of any race held at a racetrack enclosure in this state.

3. Hold more than a five percent interest in any entity doing business with a racetrack in this state.

4. Have any interest, whether direct or indirect, in a license issued pursuant to this chapter or in a licensee, facility or entity that is involved in any way with pari-mutuel wagering. For the purposes of this paragraph, "interest" includes employment.

G. The director, the deputy director, if applicable, and all employees of the department shall complete a conflict-of-interest disclosure form on initial appointment as director and deputy director, if applicable, and on hiring as a new employee. The director, the deputy director, if applicable, and all department employees shall submit an updated conflict-of-interest disclosure form annually if any conflict-of-interest information has changed.

G. H. Failure to comply with subsection F or G of this section is grounds for dismissal.

H. I. For the purposes of subsection F of this section, "immediate family" means a spouse or children who regularly reside in the household of the director or other employee of the department. END_STATUTE

Sec. 2. Section 5-223, Arizona Revised Statutes, is amended to read:

START_STATUTE5-223. Arizona state boxing and mixed martial arts commission; appointment; terms; compensation; conflict of interest; emergency ringside meetings

A. The Arizona state boxing and mixed martial arts commission consists of three members appointed by the governor pursuant to section 38-211. The term of office of commissioners is three years. The term of one member shall expire on the third Monday in January each year.

B. Two members of the commission constitute a quorum for conducting business. A concurrence of two members is necessary to render a decision by the commission. Emergency ringside meetings held immediately prior before and subsequent to after a scheduled contest for the purpose of determining whether there has been a violation of the rules and regulations of the commission or this chapter are exempt from the provisions of title 38, chapter 3, article 3.1.

C. The commissioners shall receive compensation as determined pursuant to section 38-611 for each day they act in their official capacity, not to exceed one hundred days each year.

D. A commissioner shall not during the commissioner's term of office promote, sponsor or have any financial interest in a combatant, a boxing contest or in the premises leased for a boxing contest.

E. The executive DIRECTOR, all commissioners and all department and commission employees shall complete a conflict-of-interest disclosure form on initial appointment as a commissioner and on hiring as a new employee. The executive director, all commissioners and all employees shall submit an updated conflict-of-interest disclosure form annually if any conflict-of-interest information has changed. END_STATUTE

Sec. 3. Section 5-604, Arizona Revised Statutes, is amended to read:

START_STATUTE5-604. Department of gaming; director; qualifications; term; conflict of interest; grounds for dismissal; report

A. The department of gaming is established.

B. The governor shall appoint a director of the department of gaming pursuant to section 38-211. The director serves at the pleasure of the governor. To be eligible for appointment as director, a person shall not have a financial interest in a gambling operation or in the gambling industry in this state during the term of appointment. The governor may appoint an acting director if there is a vacancy in the office.

C. The director and all other employees of the department are subject to title 41, chapter 4, article 4. The director is eligible to receive compensation pursuant to section 38-611.

D. The employment or financial interest of any relative to the first degree of consanguinity or affinity to the director or any other employee of the department in the gambling industry in this state is grounds for the dismissal of the director or employee of the department.

E. The director and all employees of the department shall complete a conflict-of-interest disclosure form on initial appointment as director and on hiring as a new employee. The director and all department employees shall submit an updated conflict-of-interest disclosure form annually if any conflict-of-interest information has changed.

F. On or before December 17 of each year, the department shall submit all department audits that are conducted by a third-party auditor to the president of the senate, the speaker of the house of representatives and the governor. END_STATUTE

Sec. 4. Title 5, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 5-606, to read:

START_STATUTE5-606. Complaints; tracking system; report

A. The department shall create and implement a complaint submission process and complaint tracking system that allow the department to track and monitor complaints relating to this chapter and chapters 2, 10 and 11 of this title. the department shall make the complaint submission process available on the department website.

B. The department shall submit an annual report to the President of the Senate, the Speaker of the hOuse of Representatives and the governor that includes all of the following information:

1. The number of complaints that were received through the complaint submission process.

2. The number of complaints that were received through the complaint submission process and that were dismissed.

3. The number of COMPLAINTS that were received through the complaint submission process and that were resolved. END_STATUTE

Sec. 5. Repeal

Sections 41-3026.04, 41-3026.13 and 41-3026.22, Arizona Revised Statutes, are repealed.

Sec. 6. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding sections 41-3032.11, 41-3032.15 and 41-3032.20 to read:

START_STATUTE41-3032.11. Arizona racing commission; termination July 1, 2032

A. The Arizona racing commission terminates on July 1, 2032.

B. Title 5, chapter 1 and this section are repealed on january 1, 2033. END_STATUTE

START_STATUTE41-3032.15. Arizona state boxing and mixed martial arts commission; termination July 1, 2032

A. The Arizona state boxing and mixed martial arts commission terminates on July 1, 2032.

B. Title 5, chapter 2 and this section are repealed on January 1, 2033. END_STATUTE

START_STATUTE41-3032.20. Department of gaming; termination July 1, 2032

A. The department of gaming terminates on July 1, 2032.

B. Sections 5-601, 5-602, 5-602.01, 5-603 and 5-604, title 5, Chapters 10 and 11 and this section are repealed on January 1, 2033. END_STATUTE

Sec. 7. Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the department of gaming to:

1. Carry out the responsibilities of the state gaming agency in compacts executed by the state Indian tribes and this state pursuant to the Indian gaming regulatory act of 1988 (25 United States Code sections 2701 through 2721 and 18 United States Code sections 1166 through 1168).

2. Ensure the integrity of fantasy sports contests.

3. Enforce and supervise compliance with the laws and rules relating to regulating and controlling event wagering in this state.

4. Regulate racing and boxing and mixed martial arts in this state in conjunction with their respective commissions.

Sec. 8. Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona racing commission to regulate the racing industry in this state for the protection of the public peace, safety and welfare.

Sec. 9. Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona state boxing and mixed martial arts commission to provide the best protection for all interested parties in the sports of boxing, kickboxing and mixed martial arts.

Sec. 10. Department of gaming; review; independent audits; event wagering; fees

The department of gaming shall review all independent audits that have been conducted as of 2021 to determine if event wagering operators have paid the correct required privilege fee amounts as prescribed by section 5-1318, Arizona Revised Statutes. The department shall address and correct any overpayments or underpayments of privilege fee payments as required by rule.

Sec. 11. Retroactivity

Sections 5 and 6 of this act are effective retroactively to from and after July 1, 2026.