Arizona Daily Fantasy Sports Sites

The Arizona Department of Gaming (ADG) regulates daily fantasy sports and may issue an unlimited number of licenses to qualified applicants. Although licensing fees are lower than average, the ADG has only approved a handful of operators due to its intensive selection process and tight regulatory controls.

Below is a complete list of operators that have received ADG licenses, beginning with BettingUSA’s highest-ranked fantasy sports sites. Bettors may also visit the ADG website to confirm which DFS operators are licensed in Arizona.

Pick’em Fantasy Sports in Arizona

PrizePicks and Underdog Fantasy are the only fantasy pick’em sports apps licensed to operate in Arizona. Fortunately, each is a reputable operator that BettingUSA has reviewed extensively and frequently recommends to fans in numerous states.

Both offer pick’em fantasy contests that involve making higher/lower predictions on athletes’ projected stat totals for metrics such as passing yards, rebounds, and points scored.

Legal Issues Surrounding Pick’em Fantasy in Arizona

The Arizona Department of Gaming issued licenses to PrizePicks and Underdog Fantasy in previous years but later revised its stance on the legality of their offerings. In November 2023, the ADG issued a guidance letter to all fantasy sports sites licensed in Arizona regarding fantasy pick’em sports.

Without naming any names, the letter stated that the ADG “has become aware that certain fantasy sports contest operators in Arizona are offering [pick’em fantasy sports contests]” and advised the operators to stop offering such contests.

The letter explained that pick’em contests are not legal in Arizona “because a key piece of a fantasy sports contest is that participants create teams and compete against one another in simulated games. The disputed wagers involve no teams, no simulations, and no competition against other participants.”

Conversely, pick’em contests “fit squarely within the definition of event wagering,” the letter explained. “So, they may only be offered by properly licensed event wagering operators.”

The ADG’s letter seemed to portend imminent doom for fantasy pick’em sports in Arizona, but Underdog Fantasy stated it would continue offering fantasy pick’em games while “working with the regulators in Arizona… as we do in all states where we operate, to address their concerns.”

Later, the ADG approved new regulations prohibiting fantasy pick’em games played against operators for fixed payouts. However, PrizePicks and Underdog retained their Arizona fantasy sports licenses by launching pick’em contests in which players compete against one another instead of against the house.

Arizona Fantasy Sports Law

Arizona fantasy sports laws require operators to apply for licenses, pay a 5% tax on revenue, and comply with all regulations adopted by the Arizona Department of Gaming (ADG).

The law that authorizes DFS in Arizona outlines the general regulatory aims, while regulations crafted by the ADG delve into the specifics necessary to achieve those aims. For example, Arizona law requires operators to apply for two-year licenses and provide certain information, while the ADG establishes the licensing process, application forms, fees, and more.

• Arizona DFS Law: AZ Rev Stat §§ 5-1201-5-1213
• Arizona DFS Regulations: AZ Admin Code R 19-4-201-4-229

Arizona Fantasy Sports Sites Licensing Conditions

Individuals and businesses the ADG deems significantly involved in daily fantasy sports must apply for one of the following categories of licenses. The ADG also imposes an initial licensing fee and a two-year renewal fee for each license:

• Fantasy Contest Operator: $2,000 initial fee; $1,000 renewal
• Management Company: $2,000 initial fee; $1,000 renewal
• Holding Company: $500 initial fee; $250 renewal
• Suppliers: $250 initial fee; $125 renewal

Operators that apply for Arizona fantasy sports licenses must comply with all applicable regulations and allow the ADG to access any part of their platforms, servers, records, and data.

Responsible Arizona DFS Advertising Rules

Fantasy sports operators in Arizona may not issue advertisements or marketing materials that:

• Contain false or misleading information
• Promote irresponsible or excessive DFS play
• Suggest social, financial, or personal success is guaranteed by participating in DFS contests
• Appear on clothing, toys, or games intended primarily for anyone under 21
• Appear in college-owned news assets
• Target colleges or university campuses

Arizona DFS Financial Security Requirements

Licensed Arizona fantasy sports sites must establish written internal control systems related to financial matters and submit them to the ADG for approval. Each operator must have internal controls that ensure the following:

• Assets are secured, and accountability over them is maintained
• Access to the operator’s assets is controlled by the individual responsible for them
• All financial transactions are approved by the individual responsible for them
• Liabilities and contingent liabilities are properly recorded and disclosed
• The operator regularly compares recorded assets to actual assets and acts when discrepancies are discovered
• The operator appropriately segregates functions, duties, and responsibilities
• Operators must undergo annual financial and compliance audits

Mandatory Consumer Protection Procedures

All licensed Arizona DFS operators must develop consumer protection procedures to accomplish the following:

• Restrict access to anyone under 21 years of age
• Verify every customer’s identity and geographic location
• Prevent the use of unauthorized scripts
• Prevent fraud, cheating, and money laundering
• Identify highly-experienced players (users who have entered more than 1,000 contests or won more than three prizes worth $1,000+ with that platform) to other players
• Mitigate problem gambling
• Provide responsible gambling training and education
• Identify, notify, and remove self-excluded or prohibited individuals from the platform
• Reconcile all funds in players’ accounts
• Issue DFS bonuses and promotions
• Respond to customer disputes
• Maintain records of all DFS contests
• Prominently display all house rules and terms
• Honor customers’ withdrawal requests within seven business days unless the operator has a good faith belief that the customer has committed fraud or put the operator in violation of state law
• Respond to customer complaints within ten days
• Prominently display problem gambling resources on Arizona DFS apps and websites
• Accept and honor customer self-exclusion requests

Information Technology Security Requirements

Arizona DFS law mandates that operators take the following steps to protect their IT systems:

• Provide the ADG with locations of all servers that run fantasy contests and implement physical security measures
• Place IT systems in secure locations accessible only by authorized personnel
• Monitor, investigate, resolve, document, and report security breaches to the ADG
• Ensure IT duties are appropriately segregated to prevent errors and the concealment of fraud
• Test the recoverability of IT systems at least once a year

Arizona Fantasy Sports Bonuses Regulations

Any Arizona daily fantasy sports bonuses must include clear rules that explain all material facts, terms, and conditions. In addition, all DFS bonuses must not restrict customers from withdrawing their own money or winnings derived from funds they have deposited.

Arizona DFS Contest Rules

Licensed Arizona daily fantasy sports apps and websites must implement measures to ensure the following:

• All entry fees are transacted through the DFS platform and come from customer accounts funded with cash or cash equivalent
• Entries are delivered immediately after customers pay for them
• Winnings are transferred immediately to customers’ accounts after verifying the results
• Contests do not involve events that have already completed
• Customers who withdraw from contests before they begin must receive immediate refunds
• Operators do not knowingly accept entries from individuals who are playing on behalf of another person
• Operators only offer contests on events approved by the ADG

How Arizona Legalized Daily Fantasy Sports

Arizona did not formally legalize daily fantasy sports until 2021. One of the reasons Arizona took so long to legalize fantasy sports is that it is one of just a few states that use a broader definition of “gambling” than federal law.

In daily fantasy’s early days, operators like FanDuel and DraftKings offered DFS contests in most states under a carveout from the federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

However, Arizona defines gambling as “the act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill….”

The inclusion of the word “skill” in Arizona’s definition of gambling precluded fantasy sports sites from offering their services in Arizona under the UIGEA exemption. As a result, fantasy sports sites restricted customers from Arizona until the state passed legislation to exempt DFS contests from the state’s definition of gambling.

In addition, concerns over whether legalization would violate Arizona’s gaming compacts with tribal operators stymied pro-DFS lawmakers’ efforts to get enough votes to pass a fantasy sports bill. Few lawmakers were willing to risk the roughly $100 million per year that Arizona’s tribal operators contribute to the state through their gaming compacts.

Lawmakers first attempted to legalize fantasy sports in Arizona in 2014 via SB 1468. The bill would have exempted fantasy sports contests from the state’s definition of illegal gambling, but it died amid resistance from the Arizona Indian Gaming Association over concerns it would violate tribal gaming compacts with the state.

Lawmakers tried again in 2016 via SB 1515, another bill that would have exempted fantasy sports contests from Arizona’s definition of illegal gambling. SB 1515 faced even more opposition from tribal gaming operators, and it died before reaching a full Senate vote.

Several more years passed without progress, but Arizona got it done by legalizing daily fantasy sports and sports wagering in one shot via SB 1797. This time, Arizona got tribal gaming operators on board by making ten sports betting licenses available to them.

While most of the focus was on legalizing sports betting in Arizona, the daily fantasy provisions cleared the way for an unlimited number of operators to apply for DFS licenses. The law also established a strict regulatory framework for fantasy sports in Arizona, including many rules related to consumer protection and responsible gambling.

Arizona Daily Fantasy Sports FAQ