Arizona Department of Gaming
202 East Earll Drive, Suite 200
Phoenix, Arizona 85012
Tel 602.604.1801
Fax 602.255.3883
www.gm.state.az.us

Janet Napolitano
Governor
Paul A Bullis
Director

September 15, 2004

The Honorable Janet Napolitano, Governor
Office of the Governor
1700 West Washington, 9th Floor
Phoenix, Arizona 85007
Dear Governor Napolitano:
The Arizona Department of Gaming, in accordance with A.R.S. § 5601.02(H)(1), hereby submits its report on tribal contributions for the period Fiscal
Year 2004. This statute requires that the report include “a statement of aggregate
gross gaming revenue for all Indian tribes, aggregate revenues deposited in the
Arizona benefits fund, including interest thereon, expenditures made from the
Arizona benefits fund, and aggregate amounts contributed by all Indian tribes to
cities, towns, and counties” pursuant to this statute.
Background
With the passage of Proposition 202 in November 2002, and the subsequent
new Tribal-State gaming compacts, the gaming Tribes in Arizona are to make Tribal
contributions to the State on a quarterly basis. The contributions are based on each
tribe’s Class III Net Win. Eighty-eight percent (88%) of a Tribe’s total annual
contribution is paid to the Arizona Benefits Fund, which is administered by the
Department of Gaming. Monies in the Arizona Benefits Fund, including all
investment earnings, are to be allocated pursuant to the terms set forth in A.R.S. § 5601.02(H). They are as follows:
1) Eight million or nine percent, whichever is greater, shall be used by the Department
of Gaming for reimbursement of administrative and regulatory expenses.
2) Two percent of the contributions made to the Arizona Benefits Fund is to be used by
the Department of Gaming to fund state and local programs for the prevention and
treatment of and education concerning problem gambling.

All other monies in the Arizona Benefits Fund, including all investment
earnings that are not allocated to the Department of Gaming as set forth above, are to
be allocated as follows:
1) Fifty-six percent to be deposited into the Instructional Improvement Fund established
by A.R.S. § 15-978;
2) Twenty-eight percent to be deposited in the Trauma and Emergency Services Fund
established by A.R.S. § 36-2903.02;
3) Eight percent to be deposited in the Arizona Wildlife Conservation Fund established
by A.R.S. § 17-299; and
4) Eight percent to be deposited in the Tourism Fund Account established by A.R.S. §
41-2306.
On a quarterly basis within a few days of receipt, the Department of Gaming
transfers these allocated monies to the above funds.
In addition to the monies contributed into the Arizona Benefits Fund, the
Indian Tribes will contribute twelve percent of their total annual contributions to
cities, towns, and counties, pursuant to A.R.S. § 5-601.02(H)(4). These payments
may be made annually based on the Tribe’s fiscal year, rather than quarterly.
Fiscal Year 2004
The Arizona Department of Gaming reports the following for the period July
1, 2003 to June 30, 2004:
•
•

Aggregate Gross Gaming Revenue 1 - $1,349,801,856
Aggregate revenues (Tribal contributions) deposited in the Arizona Benefits
Fund 2 - $37,957,013.01
Expenditures from the Arizona Benefits Fund are as follows:
Problem Gambling
Arizona Department of Gaming
Instructional Improvement Fund
Trauma and Emergency Services Fund
Arizona Wildlife Conservation Fund
Tourism Fund Account

1 Gross

$ 759,140.26
$ 8,000,000.00
$16,350,808.74
$ 8,175,404.37
$ 2,335,829.82
$ 2,335,829.82
$37,957,013.01

gaming revenue is the difference between gaming wins and losses, before deducting costs and
expenses. A.R.S. § 5-601.02(I)(6)(b)(ii)(pp).
2 Interest is not earned because most of the monies that are received in the fund each quarter are
transferred to the recipient funds within a few days of receipt. The remaining monies consist of the
agency’s operating budget for that quarter and, therefore, cannot be invested and divested as set forth
in A.R.S. § 5-601.02(H)(2). The Department of Gaming receives only $2 million per quarter for
reimbursement of its administrative and regulatory expenses for that quarter.

•

Aggregate amounts contributed by all Indian Tribes to Cities, Towns, and
Counties - $2,590,530.
On behalf of the Department of Gaming, I respectfully submit this report and
welcome the opportunity to discuss any aspect of it with you or representatives from
your office at your convenience.

Sincerely,

Paul A. Bullis
Director