When Ryan Smith—the billionaire owner of the NBA’s Utah Jazz—announced that he would be buying up the NHL’s Arizona Coyotes, more than a few heads turned. He had previously been open about his desire to move the team to Salt Lake City and, while sports teams change cities all the time, this one might have a few unintended consequences.
The Current Situation and Licensing Status
The Arizona Coyotes have been a struggling franchise for years. They haven’t managed to reach the playoffs since the 2011-2012 season and have struggled to find a long-term venue in Arizona. Nonetheless, their official sports betting platform, SaharaBets, has found a dedicated fan base.
In Arizona, event wagering licenses can be given to professional sports teams or Native tribes and the Coyotes have been operating SaharBet since 2022. Once the team officially left the state, though, questions began to arise about whether or not the team’s license would remain valid. After all, if the Arizona Coyotes no longer exist, who does the license belong to?
This is further complicated by the fact that the purchase of the Coyotes wasn’t exactly “traditional”. When Ryan Smith bought the team, what he actually bought were their hockey operations, player roster, and draft picks. He did not buy the team’s name, logo, or any other intellectual property. So, if the “Arizona Coyotes” are now nothing more than a relic of the sport’s past, who owns and operates SaharaBets’ license?
Licensing Conundrum and Loophole
According to the NHL, the team’s previous owner, Alex Meruelo, is still the owner of the Coyotes franchise (as well as the legal operator of SaharaBets) and he has five years to reactivate the franchise before the league steps in. The fact that the NHL still acknowledges the team’s legitimacy and has simply labeled them as “inactive” seems to imply that they can retain their license.
This seems to be echoed by the Arizona Department of Gaming, no one from either the Coyotes or SaharaBets has reached out to them on the issue, and, as far as the ADG is concerned, there’s nothing that they can do. It seems that since the team does still exist as a licensed entity in Arizona, its license remains valid. Of course, this doesn’t mean they can play on both courts, like taking in another license from the new state and using it for the legacy entity, while simultaneously registering the old license to a new FatFruit Casino online gaming platform brand.
At this juncture, the ADG is, apparently, unable to take any action against the team since they haven’t violated any stipulations of the terms of its licensure. According to an ADG rep, the only option now would be for the state’s legislature to amend the law—or pass a new one—stating that any team must be active in Arizona to continue operations.
At this point, it does seem worth mentioning that Maruelo has operated the platform in good faith since 2022 and, to date, has paid the state of Arizona $48,000 in taxes. While that might not be huge compared to a state’s coffers (or compared to the $1.2 billion that he paid for the team), states are hard-pressed to give up any source of revenue.
Impact on Tribal Applicants
As mentioned, Arizona offers events wagering licenses to professional sports teams and Native tribes. Across the state, there are only 20 licenses available; ten for sports and ten for tribes. When the first wave of license applications was submitted in 2021, only eight teams were approved leaving two ungranted licenses. At least one other team, the United Soccer League’s Phoenix Rising, applied in 2021 but was rejected as the USL was not considered to be the “highest level” of sport. This leaves two ungranted (and still unused) events wagering licenses.
On the flip side, far more than 10 tribal organizations applied for licensure. While all ten were granted, many organizations were left out in the cold despite the fact that two licenses were sitting unused. So, at this point, Arizona has two of its ten sports licenses completely unused and a third being used by a team that, for all intents and purposes, no longer exists.
Gaming revenue is a major source of income for many Native tribes across the American Southwest, and this decision could set a dangerous precedent. After all, if the state is willing to let a now-defunct team continue operations under the guise of making more money for the state, then why not go the extra mile and make sure that all licenses are given away to qualified entities?
Seeing as how the state doesn’t even have ten major sports teams that qualify, why not allow unused licenses to go to qualifying tribal organizations?
What Come Next
At this stage, it seems unlikely that the Arizona legislature will address this, admittedly, rather niche issue. Likewise, Maruelo still owns the rights to the Coyotes as well as outright owning their minor league partners the Tuscon Roadrunners. With five years to rebuild, it’s entirely likely that the Coyotes make a comeback but only time will tell.
