Editorial

How Does The Sports Betting Market In Arizona Look Since Its Inception?

On September 9, 2021, Arizona began its sports betting market. It was instantly evident that the Copper State would be a reasonably robust market, potentially outperforming its 7.3 million residents.

When the state published September’s income report on November 29, 2021, the committee had high hopes. During the holiday break, the September income data was finally revealed, along with those for October. 

To learn about the best betting platforms in the Arizona sports betting market, read AZ sports betting

This article analyzes how Arizona’s sports betting industry has fared since its inception in September 2021. It informs you about the key market leaders as well as the hurdles the industry faces as it evolves in the future.

Financial Report on Sports Betting Industry in Arizona

Coming back to the report, the topline statistics were absolutely robust. The state achieved revenue figures of $291.2 million in a shortened first month and dabbled with $500 million in handling during October’s five NFL weekends. 

The majority of October’s wagers were placed online, with retail betting venues accounting for only $6.8 million of the total transaction of $486 million. 

The handling figures for October place Arizona sports betting slightly outside of the top five and on track with two successful sports gambling projects, Colorado ($491 million) and Michigan ($497.5 million).

Gross Revenue Was Greater Than $30 Million For Both Months

  • September: $31.6 million
  • October: $36.3 million

However, these figures come with a substantial catch.

The above modified gross income figures exclude a crucial adjustment: promotional play. Arizona permits operators to exclude promotional expenditures from its tax revenue. Additionally, casinos were not hesitant to use free bets to get users through their gates (virtual or physical).

After eliminating promotional wagers, Arizona sportsbooks grossed $10 million in October and almost $400,000 in September. This amounts to over $56 million in free bets within the first two months of service.

At the operator level, Arizona is not distinct from other markets. FanDuel, BetMGM, and DraftKings accounted for around 75%, or $364.44 million, of all wagers placed in October. Caesars Sportsbook’s October handle of $69.2 million was a stunner, with WynnBet and Penn National also standing out in the market.

Top 7 Sports Betting Platforms Based on Revenue

  1. DraftKings: $151.5 million
  2. FanDuel: $115.9 million
  3. BetMGM: $92.1 million
  4. Caesars: $69.2 million
  5. Penn National: $26.2 million
  6. WynnBet: $20.7 million
  7. Churchill Downs: $1.6 million

Essential Aspects of the Law

Here are some further important aspects of the law:

  • Each license holder is permitted to offer one retail bookmaker and up to 2 online skins.
  • Suppose they are approved as restricted event wagering operators. In that case, professional sports clubs may join with state racetracks to offer an extra retail outlet.
  • The state prohibits prop wagers on collegiate teams or individual players.
  • The state imposes a 10% tax on online betting and an 8% levy on retail wagers.
  • The application outlay for a sports betting license is $100,000, the initial license fee is $750,000, and the annual license renewal fee is $150,000.
  • The application fee for confined event wagering operators is $1,000, the license fee is $10,000, and the renewal fee is $5,000.

Is the Sports Betting Market in Arizona Feasible?

Arizona is not an exception in terms of free play. Sportsbooks have saturated market opportunities in every state with promotional and marketing wagers. Nevertheless, the buying spree may be more feasible with Arizona’s free play discount.

It is uncertain for how long Arizona’s sports gambling businesses can afford to offer promotional events. From September to October, promotional play decreased dramatically, with companies offering up to 12% of revenue in September but only 5% in October.

Arizona’s Gambling Statutes and Regulations

In April 2021, retail and online sports gambling became authorized in Arizona after Gov. Doug Ducey approved HB2772, a successor to SB1797. The bill appointed the Arizona Department of Gaming as the industry’s regulating agency. It authorized up to twenty sports betting licenses in the state.

The division of licenses was both easy and challenging. Arizona issued ten licenses to major league teams and organizations. The remaining ten were allotted to tribes of Native Americans with existing pacts with the state.

The controversy erupted because some experts claim that there are more qualifying tribes in Arizona than several licenses, which was and remains a dilemma for state legislators. Some excluded tribes opposed the procedure and sought legal recourse. 

Even though a bill is under review that may resolve the issue, several Arizona tribes remain on the outside looking in and continue to seek remedy in court. In the interim, Arizona sports betting continues under the current system.

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