Cliff Castle Casino is exploring appeal options after the state of Arizona issued a license to conduct online fantasy sports betting then took it away, claiming the issuance was in error.
According to a press release issued by the casino, Cliff Castle received an Event Wagering Operator License for online sports betting in the state on Aug. 23, four days before the Arizona Department of Gaming’s deadline to issue the licenses on Aug. 27. On Aug. 25, the department contacted Cliff Castle to notify management that their issuing of a license to the casino was an “administrative error.”
Casino management was unsure of the nature of the error and assumed that the department hadn’t meant to issue the license before their Aug. 27 deadline, according to the release. However, when the day for issuing licenses arrived, Cliff Castle Casino was informed, allegedly without explanation, that it had not been selected for an Event Wagering Operator License.
“During the licensing process, we had expectations that the Arizona Department of Gaming would be transparent in how the licenses were awarded,” Cliff Castle Casino General Manager Aaron Moss said in the release. “The fact that we were issued a license and then told that we did not get a license with no explanation has raised more questions than answers about the license allocation process.”
The Arizona Department of Gaming was not able to provide information to Larson Newspapers about why Cliff Castle Casino and the Yavapai-Apache Nation were not among those to receive a license.
According to section R19-4-106(E) of the event wagering rules, the qualifications for receiving a license include the businesses’ ability and record of sustaining event wagering operations; their track record of gaming experience; good standing in other licenses and permits; commitment to make local investments in the community; an investment in player protection; the ability to begin event wagering operations within six months; the ability to maximize privilege fees to the state; financial stability; demonstrated regulatory compliance; the lack of opportunity to benefit from event wagering without a license; increased employment; an appeal to an unaddressed market; and contribution to the community, among others.
The Arizona Department of Gaming received a total of 16 qualified tribal applications, of which they had to choose only 10, and eight applications for sports teams and organizations, all of which were awarded.
Max Hartgraves, public information officer for the Arizona Dept. of Gaming, provided the following statement regarding the administrative error:
“On Monday, Aug. 23, 2021, an administrative error led to the false issuance of a Tribal Event Wagering Operator License to Cliff Castle Casino Hotel entirely outside of the license allocation process used to distribute the available licenses. Upon learning of this error, the department immediately retracted the falsely issued license and notified the applicant accordingly.”
“Representatives from the department spoke with representatives for Cliff Castle Casino Hotel again on Wednesday, Aug. 25, 2021, to assure Cliff Castle that:
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The employee involved in the false issuance due to administrative error was not involved in the allocation process and had no knowledge of any internal decisions on that matter.
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No allocation decisions had yet been reached by the independent internal committee, and
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The department would meet the allocation deadline of Aug. 27, 2021, for all Event Wagering Operator Licenses.
“The department sent two additional written communications following upon these points to Cliff Castle representatives on Thursday, Aug. 26, 2021. The department has worked throughout the process to openly communicate with stakeholders and preserve the impartiality and integrity of this process while complying with the confidentiality provisions mandated by Arizona Revised Statute §5-1305(H) and will continue to do so.”
James Perry, director of marketing for Cliff Castle Casino, said they do have the right to appeal the decision and they are currently evaluating their options.
“We are extremely disappointed that the Arizona Department of Gaming ultimately chose not to grant the Yavapai-Apache Nation and Cliff Castle Casino an Event Wagering License,” he said.
Perry said had they been awarded a license, the revenue from event wagering would have benefited the Yavapai-Apache Nation.
“Revenue from the event wagering under the license would have supported tribal programs for the Nation’s members,” he said.
He said the revenue would have also helped the casino offset the projected negative economic impacts brought on by amendments to the Tribal-State Gaming Compacts, which were signed by Arizona Gov. Doug Ducey and the Arizona Tribes in April. The compact sets standards for gaming machines, authorizes state inspections, requires background checks and licensing of employees and vendors and requires tribes to contribute a portion of their revenue to state and local governments, and dictates the type of games allowed at Arizona casinos.
Part of the amendments to the compact included allowing online fantasy sports betting and games through casinos as well as sports teams and organizations. The ruling has been a controversial one, and has prompted a lawsuit from the Yavapai-Prescott Indian Tribe against the state that alleges the ruling “completely eliminates the gaming exclusivity within the State of Arizona that the Yavapai-Prescott Indian Tribe, among other tribes, enjoyed under their existing compacts with the State of Arizona.”
Cliff Castle Casino has operated since 1995 and welcomes 1.4 million visitors a year to its 650 slot machines, convention center, bowling alley and restaurants. Revenues are used to benefit the 2,300 members of the Yavapai-Apache Nation.
