## Facts

- Jeremy E. Simms, a part owner of T.P. Racing, L.L.L.P., applied to the Arizona Department of Gaming for state certification to provide off-track betting services to tribal gaming casinos.
- After investigating Simms, the Department issued a Notice of Intent to Deny State Certification citing concerns about questionable business practices, illegal activities, and financial dealings with a person allegedly tied to organized crime.
- The Notice provided a 30-day period to appeal before it would become a final departmental order.
- Simms timely appealed, and an administrative hearing was scheduled.
- Before the administrative hearing occurred, Simms filed a superior-court special action seeking to stop the Department from proceeding, asserting the Department lacked authority to deny certification and lacked authority to refuse his requested withdrawal of the application.
- The State offered to allow withdrawal only if Simms agreed not to reapply; Simms did not agree.
- The superior court ruled the Department could not deny Simms’s request to withdraw, reasoning the Department’s power arose from tribal–state compacts under IGRA rather than the State’s general police power.
- The Governor and the Department’s Director appealed.

## Issues

1. Whether the Arizona Department of Gaming has implied authority to deny an applicant’s request to withdraw a certification application after the Department has issued a notice of intent to deny.
2. Whether the Department’s regulatory authority is grounded in Arizona statutes and state police power (supporting discretionary licensing control) rather than being limited to compact/IGRA-based authority.
3. Whether Simms was required to exhaust administrative remedies before seeking superior-court relief, and whether that defense was preserved.

## Decision

- The Arizona Court of Appeals reversed the superior court.
- The court held the Department has implied authority to deny a request to withdraw a certification application and to proceed to a licensing determination.
- The court rejected the superior court’s view that the Department’s authority was merely compact-based; it held the Department operates under Arizona statutes and the State’s police power to protect the public and the integrity of Indian gaming.
- The court’s disposition restored the primacy of the administrative process for resolving the certification dispute.

## Legal Principles

- An administrative agency possesses not only express statutory powers but also those reasonably implied as necessary to carry out its statutory responsibilities.
- A gaming regulator’s suitability-screening function supports implied authority to complete an investigation and issue a formal determination, even if an applicant seeks to withdraw after adverse information is identified.
- State regulation of participation in Indian gaming services may rest on state statutes and police power aimed at excluding unsuitable individuals and protecting gaming integrity, not solely on compact terms.
- Courts should generally refrain from interrupting ongoing administrative adjudication where the agency has authority to act and an administrative forum exists for initial resolution.

## Conclusion

The court held that Arizona’s gaming regulator may refuse an applicant’s attempted withdrawal and proceed to a final certification decision because that power is implied from the agency’s statutory duty, grounded in the State’s police power, to exclude unsuitable persons and protect the integrity of Indian gaming.


Simms v. Napolitano, 73 P.3d 631 (Ariz. Ct. App. 2003)