Arizona’s Legal Sports Betting Industry Made a Strong Start

Kyler Murray #1 of the Arizona Cardinals throws the ball. Richard Rodriguez/Getty Images/AFP

Arizona sportsbooks handled $777.3 million worth of wagers during the first two months of the state’s legal online wagering industry. The Grand Canyon State ushered in a brave new era when the first online sportsbooks began accepting customers on September 9.

The Arizona Department of Gaming has just released event wagering revenue reports for September and October 2021. They paint an encouraging picture for operators in the state.

Arizona Sportsbooks Enjoy Best Opening Month on Record

Sportsbooks in Arizona handled $291.2 million in wagers during September. That exceeded the previous record of $131.4 million that Tennessee sportsbooks handled on their debut month in November 2020. The state offered 20 online sports betting licenses. Operators had to tie up market access deals with professional sports teams, venues, or tribes to launch.

DraftKings, which agreed on a deal with PGA Tour venue TPC Scottsdale, made a blistering start, handling $97.7 million worth of wagers during September. That left it as the number one sportsbook in the state, ahead of BetMGM ($58.9 million), FanDuel ($57.9 million), and Caesars Sportsbook ($42.2 million).

Caesars teamed up with the Arizona Diamondbacks, FanDuel partnered the Phoenix Suns, and BetMGM linked up with the Arizona Cardinals. There were just eight online sportsbooks that launched in September.

Handle Soared in October

The handle shot up to $486.1 million in October, the first full month of online sports betting in Arizona. That left it as the seventh-largest state for sports wagering, behind New Jersey, Nevada, Illinois, Pennsylvania, Michigan, and Colorado, but ahead of Indiana, Virginia, and Tennessee.

That represents a strong start. The number of operators increased to nine in October, but DraftKings consolidated its lead at the top of the standings. It handled $151.5 million worth of wagers. FanDuel was second with $115.9 million.

It also has a retail sportsbook in Arizona, which handled $8.49 million, taking FanDuel’s total to almost $124 million. BetMGM was third with $92 million. Caesars finished fourth against with $69.2 million. It operates the only other retail book in the state, which took almost $2 million in bets during October.

Promotional Credits Wipe Out the Gross Revenue

Sportsbooks in Arizona kept $31.6 million in revenue during September, which amounts to a hold of more than 10%. However, they handed out $31.2 million in promotional credits, leaving taxable revenue at just $392,417, so the state did not earn much in the way of tax.

In October, bettors had a stronger month, and the hold was just $36.3 million on a much larger handle. Operators gave out just under $26 million in promos during October, leaving the adjusted gaming revenue at $10.35 million. The state, therefore, made more than $1 million in taxes for October.

When promotional spending was deducted, BetMGM had the highest revenue for October, with $2.8 million. DraftKings was next, with $2.45 million, followed by FanDuel with $2.26 million.

It suggests that DraftKings, FanDuel, BetMGM, and Caesars Sportsbook could emerge as the big four online sportsbooks in the country over the next couple of years, although rival operators like BetRivers and Unibet are gaining some traction in Arizona.