Tucson Sugar Skulls Pursue Lawsuit After Arizona Sports Betting License Denial
The Team’s Attempt to Secure an Arizona Sports Betting License
The Tucson Sugar Skulls, an Indoor Football League franchise, have initiated legal proceedings against two prominent law firms and several of their partners. This action follows a failed effort to obtain a sports betting license in Arizona.
The lawsuit, which was filed on October 30 in Pima County Superior Court, targets Heidi Staudenmaier and the firm Snell & Wilmer LLP, alongside Adam Berger and Duane Morris LLP. The Sugar Skulls assert that these attorneys put their ties with major sports betting companies, including Fanatics Betting and Gaming, above their professional duties to the team.
Background of the Partnership and License Application
In 2023, the Sugar Skulls partnered with Fanatics to compete for one of the limited event wagering operator licenses under Arizona’s Event Wagering Act. This collaboration was expected to be highly advantageous for the team, guaranteeing a $5 million payment on license approval and entitling them to a share of Fanatics’ yearly profits and marketing revenues.
Nevertheless, the Arizona Department of Gaming (ADOG) turned down their joint bid in August 2023, citing that the team’s home arena did not meet the minimum seating capacity of 10,000. The decision led to a fallout between the Sugar Skulls and Fanatics, with the team blaming their lawyers for poor handling of the appeal and undisclosed conflicts of interest.
The Legal Conflict and Alleged Financial Losses
The core of the legal dispute revolves around the structuring of Fanatics’ application. The Sugar Skulls maintain that they intended to pursue an online-only wagering license rather than one connected to a physical sportsbook. However, they claim their legal counsel allowed Fanatics to submit a joint retail and online license application without proper consent, which ultimately resulted in failure.
Despite informal feedback from ADOG suggesting a new online-only proposal might be successful in the next licensing round, Fanatics ended the partnership prematurely. Fanatics then allied with a tribal gaming entity and secured a state license in March 2024.
The Sugar Skulls tried to block Fanatics’ renewed application in court but were unsuccessful; the judge ruled that Fanatics’ independent bid did not pose a direct business threat. The team now claims that this lost opportunity deprived them of potential profits estimated at $15 million over five years and up to $50 million over ten years, while Fanatics continues to operate successfully.
