Money from the gambling industry has poured into several key Arizona races as a new cohort of operators ramps up efforts to influence Grand Canyon State leaders.
Online gambling platforms, sweepstakes operators, allies of cryptocurrency, and prediction markets are some of the players spending big on the midterm elections and hiring lobbyists as their operations draw scrutiny in Arizona and other states.
The influence campaign represents a growing bid by the industry to negotiate with state leaders from both political parties — or, at least, get them to take a meeting.
Many of the companies are hedging their bets in Arizona by giving money to both political parties or even donating to opposing candidates in the same race.
Their agendas and histories are wide-ranging:
— Underdog Sports, a fantasy sports operator, has financially supported both candidates in the Arizona attorney general's race. Meanwhile, the company is in settlement negotiations with the Arizona Department of Gaming over a cryptocurrency deal that regulators deemed illegal in 2025.
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— VGW Luckyland, which offers "sweepstakes" online games, has scaled back its operations in more than a dozen states after blowback from regulators and lawmakers, according to Casino Industry News. Now, the firm is donating to Republicans’ efforts to maintain control of the Arizona Legislature, while also helping to fund both candidates for attorney general, as it makes the case that its operations shouldn't be considered gambling under state law.
— Jackpocket Inc., an online lottery sales platform, and its parent company, DraftKings, have donated more than $100,000 to Arizona Democrats over the last three years. In 2025, the Hobbs administration began considering rulemaking that would have legalized Jackpocket's business model — while other states restricted or banned it. The rule has since been terminated.
The new operators face a sensitive political road ahead.
Their presence in Arizona puts them in competition with the state’s more established gambling interests. Those include Native American tribes, who are guaranteed exclusive rights over many forms of gambling as part of a decades-old state compact, and the sports betting industry, which former Gov. Doug Ducey legalized in 2021.
Other federal legal challenges over prediction markets have escalated to the U.S. Supreme Court.
The industry also faces growing public health concerns, as a surge of Arizonans shows signs of "problem gambling."
But welcoming and taxing the new operators could create a multimillion-dollar stream of revenue for Arizona, as the state stares down tough budget trade-offs and federal funding cuts.
Arizona’s top Democrats have taken an aggressive stance toward some of the new gambling operations, though the party has benefited from the industry’s political contributions.
Arizona Attorney General Kris Mayes has locked horns with betting giant Kalshi, and Gov. Katie Hobbs has overseen a flurry of disciplinary actions against companies that her administration says are operating illegally.
Hobbs also proposed hiking taxes on the biggest sports betting operators from 10% to 45% as part of the 2026 budget negotiations, though the measure didn’t pass.
Prediction markets have become a wedge issue in the attorney general's race, with Republican Warren Petersen saying he would welcome operators like Kalshi in the state.
Jaime Molera, a lobbyist for the Arizona Indian Gaming Association, said he is aware of the new operators’ presence at the Legislature. He warned state leaders not to make changes without consulting the tribes.
“All of a sudden, these companies come in, they throw some money around, they hire some lobbyists, they talk to political leaders, and they basically want to usurp this agreement that’s been made,” he said.
“It’s very disconcerting for the tribes, and for AIGA.”
VGW declined to comment. Media contacts and lobbyists for the other gaming operators named in this story did not return requests for comment.
Embattled fantasy sports operator funds both sides of AG's race
Arizona regulators have scrambled to respond to the flood of new operators. The Gaming Department has warned the public to be wary of unlicensed operators and issued a flurry of cease and desist letters to companies that regulators say are operating illegally in the state.
One of the dozens of companies regulators have targeted recently is Underdog Sports, which has a license to offer fantasy sports services in Arizona.
Underdog announced a partnership with Crypto.com on Sept. 2, 2025, months after state regulators accused the cryptocurrency platform of operating illegally in Arizona.
Regulators in a letter dated Sept. 15, 2025, warned Underdog that they were scrutinizing the arrangement, according to copies of the documents obtained by The Arizona Republic. The company argued that the disputed cryptocurrency-related offerings weren’t available to players located in Arizona.
The Gaming Department wasn’t convinced. It announced plans to revoke Underdog’s fantasy sports license on Dec. 5. Crypto.com scaled back its presence in Arizona a week later, halting "all event contract offerings it made available to the Arizona market," including the disputed activity with Underdog, according to the agency.
Since then, the company has been involved in settlement negotiations with Arizona regulators. Those negotiations were ongoing as of mid-October, according to Gaming Department spokesperson Jessica Roza.
Underdog did not return several requests for comment.
In the meantime, political spending from Underdog is supporting both sides of the Arizona attorney general's race. The company has donated to the Democratic Attorneys General Association since at least 2023, contribution records show. In February, $107,500 of that tranche was transferred into a Democratic fundraising vehicle supporting Mayes.
Delaney Corcoran, a spokesperson for Mayes, said the attorney general is committed to holding companies accountable “regardless of their political connections or financial influence.”
“Attorney General Kris Mayes has made clear that her responsibility is to protect Arizonans, not special interests. Her record speaks for itself, including taking on prediction market companies like Kalshi when they clearly break Arizona law,” Corcoran said.
Underdog has also given $10,000 to a political group supporting Petersen, her opponent.
'Sweepstakes' operator gives big as rules remain unclear
Another politically active company, VGW Luckyland, operates a “sweepstakes” style of gaming that has drawn pushback in a dozen other U.S. states.
The company has argued that its operations should not be considered gambling because players aren’t required to spend money to win. Instead, company representatives describe its operations as “casino-themed.”
That didn’t convince New York’s attorney general, who in September settled claims that the company’s online casinos constituted illegal gambling.
Arizona’s regulation of that sector is still taking shape. The term “sweepstakes” is not formally defined in state law.
In the meantime, VGW Luckyland has donated six figures to Arizona politics ahead of the midterm elections and hired a local lobbying firm in late 2025.
VGW has given $140,000 to Republicans’ efforts to maintain control of the state House and Senate, records show. The company has also given $10,000 to a political group supportive of Petersen, $70,000 to a Navajo County-based fundraising vehicle supporting Mayes, Hobbs, and other Arizona Democrats, and another $75,000 to the same Navajo County entity as part of a transfer from the national Democratic Attorneys General Association.
VGW declined to comment.
Arizona regulators have signaled they are scrutinizing the industry. The Gaming Department said it sent cease and desist letters to a number of other sweepstakes operators in the state in 2025, though those press releases made no mention of VGW.
Other players target attorney general's race
The gambling industry has targeted the race for Arizona attorney general, the state’s top law enforcement officer.
The topic has divided Petersen and Mayes.
Mayes filed criminal charges against the companies behind Kalshi’s platform in March, arguing their operations violated a state law that prohibits betting on elections.
“Arizona will not be bullied into letting any company place itself above state law,” Mayes wrote in a news release.
Petersen disagreed.
“I’m troubled by the decision by AG Mayes to pursue a twenty-count criminal indictment against Kalshi. Prediction markets are a service that is expressly permitted under federal law,” he wrote on social media in response to Mayes’ announcement. “Arizona citizens and businesses use these for lawful, legitimate purposes.”
A spokesperson for Petersen argued Mayes' charges against Kalshi are motivated by politics in a written statement to The Arizona Republic. The statement also criticized the attorney general's record on data centers, utility rates, and transgender issues.
"The only wedge issue in this race is that Mayes has a dangerous record of picking and choosing what laws she wants to enforce," wrote Chad LeBeau, Petersen's campaign manager.
Mayes, he continued, "is trying to score cheap political points by attacking businesses. Arizonans and law enforcement are tired of it.
Industry money has flooded both the Republican and Democratic attorneys general associations, national groups that help fundraise for their parties' attorneys general nominees.
Some of those donations have wound up in the same Navajo County fundraising vehicle that Mayes and other Arizona Democrats are using for the 2026 midterms. Among those donations were $54,500 from the sports betting giant DraftKings and $59,500 from the cryptocurrency operator Coinflip.
DraftKings has had a presence at the Arizona Legislature since 2017. CoinFlip and Kalshi hired an Arizona lobbying firm in 2025 and 2026.
The national attorneys general associations host private networking events where corporate leaders can meet with state attorneys general and their staff.
The Republican Attorneys General Association has also helped boost Petersen.
The Democratic Attorneys General Association told The Republic that donors are not able to direct their contributions to specific campaigns or candidates across the country.
“DAGA has seen an increase in donations of all kinds as the importance and growing impact of AGs is recognized,” the statement reads. “Decisions about which campaigns DAGA gives to, and the amount given, is made independently by DAGA.”
