Monarch Content Management LLC v. Arizona Department of Gaming

2019 WL 7019416 (2019)

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Monarch Content Management LLC v. Arizona Department of Gaming

United States District Court for the District of Arizona
2019 WL 7019416 (2019)

Facts

In 2019, Arizona enacted HB 2547, a statute providing that any simulcast of live horseracing or dog-racing into Arizona from out of state had to be offered to each commercial live-racing permittee in Arizona. HB 2547 also required simulcast providers of horseraces originating in Arizona for the purpose of pari-mutuel wagering (i.e., betting that provided for distribution among winning bettors of at least the total amount wagered, less any amounts withheld by the state) to comply with the same requirements. Monarch Content Management LLC (Monarch) (plaintiff) was an agent for several out-of-state racetracks. Monarch had a contract with Turf Paradise in Arizona, pursuant to which Monarch provided to Turf Paradise simulcasts of out-of-state races and access to pari-mutuel betting pools and real-time betting odds. Turf Paradise was one of only two racetrack and off-track betting (OTB) operators in Arizona to have a pari-mutuel-wagering permit from the Arizona Department of Gaming (the department) (defendant). Monarch did not want a simulcast-wagering contract with the other permittee, Arizona Downs. However, when HB 2547 became effective, Monarch would have had to either enter into a contract with Arizona Downs or stop providing any simulcasts for pari-mutuel-wagering purposes in Arizona. Monarch sued the department before HB 2547’s effective date, seeking injunctive relief preventing the enforcement of HB 2547. Monarch asserted that HB 2547 was preempted in part by the Interstate Horseracing Act (IHA) because there was a conflict between the IHA—which provided that interstate off-track wagers could be accepted by OTB sites only with consent from the host racing association (i.e., the entity conducting the horserace)—and the Arizona statute’s requirement that simulcasts be offered to all permittees in Arizona, even if the host racing association did not consent to off-track wagering at a permittee’s facility. Monarch also asserted that HB 2547 was unconstitutionally vague and violated the First Amendment, the Contract Clause, the Fourteenth Amendment, and the Dormant Commerce Clause.

Rule of Law

Issue

Holding and Reasoning (Tuchi, J.)

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