Arizona appears primed to emerge as a promising and competitive legal sports betting market. The regulations outlined in Arizona’s sports betting bill set the stage for what could unfold as one of the most successful new sports betting hubs in the US.
With just a few sportsbook apps live in Arizona, up to 20 different online sportsbooks could eventually launch in partnership with tribal casinos and professional sports franchises and venues in the state. This approach ensures competition for market share and likely draws sports betting’s most viable brands to Arizona.
ArizonaCasinos.com projects that at full maturity, mobile sports betting could produce $252 million in annual revenue. Using the minimum tax rate of 8% outlined in the Arizona sports betting bill, that projection would yield $20,160,000 in yearly tax revenue for the state General Fund.
The Potential For An Arizona Sports Betting Boom
With up to 20 mobile sports betting apps potentially launching, the Arizona market offers bettors a selection of online sportsbooks that rivals any other US state. The two biggest online sports betting markets in the US, New Jersey, and Pennsylvania thrive under a similar model.
Arizona enters the US sports betting market with a rich tradition of sports and a robust tribal casino industry. The ADG awarded ten online-only sports betting licenses to tribal casinos and an additional eight licenses to professional sports teams, such as TPC Scottsdale golf course, Phoenix Raceway, and other professional sports franchises. In addition to the mobile-only licenses awarded to tribal casinos, the tribes can accept in-person wagers on their land under a separate Arizona Gaming Compact between tribes and the state government. Those sportsbooks are currently being built and some casinos offer kiosks until then.
The ten licenses allotted to non-tribal entities allow operators to offer both mobile and land-based sports betting. DraftKings Sportsbook and TPC Scottsdale, for instance, inked a deal that puts a retail DraftKings-branded sportsbook on-site at the golf course.
The DraftKings Sportsbook mobile app launched under the TPC Scottsdale partnership, allowing Arizona players to wager with the DraftKings app from anywhere in the state.
FanDuel and The Phoenix Suns announced a similar partnership, and the Arizona market will likely draw more of sports betting’s most prominent brands to the state. The sportsbook inside the Footprint Center, home of the Suns, is currently open.
Other partnerships include:
- Bally Bet with The Phoenix Mercury
- WynnBET with the San Carlos Apache Tribe
- Unibet (Kindred Group) with the Fort Yuma Quechan Indian Tribe
Mobile Wagering Will Drive The Arizona Market
With four major sports franchises, a NASCAR racetrack, and a PGA championship golf course, Arizona’s professional sports entities make natural fits for sports betting partnerships. While on-site books at Phoenix sports venues will certainly produce revenue, the biggest upside for Arizona sports betting comes from mobile wagering.
Three of the top revenue-earning sports betting markets in the US (New Jersey, Pennsylvania, Illinois) draw more than 90% of revenue from online sports betting. Arizona appears poised as a prime mobile sports wagering market.
The allowance of up to 20 sports betting licenses sets the scene for an ultra-competitive Arizona market. Arizona becomes the second state to allow tribal casino ownership groups to compete for mobile sports betting market share.
Michigan, the newest arrival to the US legal sports betting industry, operates with a similar model. Both tribal casinos and sports franchises can partner with brands like BetMGM, Caesars Sportsbook, WynnBET, and PointsBet, bringing the marketing expertise behind those brands to the Arizona market.
Our $252 million annual revenue projection assumes an 8% tax rate on mobile sports betting revenue and predicts what the market can produce at full maturity. Arizona Casinos projects the state as a potential $300 million sports betting market annually, with $252 million per year from online sportsbook revenue.
The $252 million annual revenue projection comes forth through analysis of other US and international markets. Sports betting reached new heights in the US in 2020, despite shortened and rearranged regular seasons in the NBA, MLB, NCAA men’s basketball, and the NHL.
Arizona enters the legal sports betting industry at the perfect time, as mobile sportsbooks have launched in the Grand Canyon State in time for the 2021 NFL season. All 20 sportsbooks are not in business at that time, but the Arizona Joint Legislative Budget Committee projects the market to reach maturity by 2024.