Momentum Continues Online and in Retail Books
Sports betting continues to be a booming business in Arizona, as the Department of Gaming has just recently revealed the January bet totals. Bettors wagered close to $564 million, with most bets placed via mobile apps. Native American tribes and professional sports teams offer mobile betting, while only two brick and mortar facilities were involved in the monthly totals.
In total, 12 online operators and the two land-based facilities were able to earn over $40 million after paying taxes. Operators handed out over $20 million in free wagers, leaving only $19.6 million to be taxed. The state earned $1.9 million from the month’s totals.
Arizona Sports Betting Gross Wagering Totals
The dominating operators in Arizona for sports betting are the mobile providers. So, let’s start with the retail facilities first. Caesars generated just over $1 million in bets, while FanDuel generated quite a bit more at just over $3.9 million. Both facilities were busy with sports betting activity in January but earned nothing compared to their online counterparts.
The top operator for mobile wagering in January was DraftKings. The operator generated over $173 million in wagers. In second place was FanDuel with $149 million bets. In a close third was BetMGM, with over $120 million in bets.
After BetMGM, the competition dwindles a bit. The closest competitor is Caesars, with just over $72.4 million in wagers placed. They are followed by Barstool Sports, operated by Penn National Gaming, with just over $21 million in bets. The numbers then drop considerably when looking at bets placed via TwinSpires, Fubo, Sahara Bets, SuperBook, Unibet, and WynnBet.
Reviewing the earnings reports, after substracting the free bet amounts, FanDuel came out in first, with just over $7.9 million in revenues. DraftKings was a close second with $6.6 million. A little bit further behind is BetMGM, with just over $2 million in earnings. Caesars managed to generate just over $1.6 million, followed far behind by WynnBet with $488,000+.
What Will 2022 Bring?
Sports betting legally began in Arizona on September 9, 2021. Through the remainder of the year, gamblers bet over $1.7 billion via licensed operators. This generated around $60 million in revenue. Taxes to the state came in at just over $6 million.
2022 will mark the first full year that sports betting is in operation in the state. The industry is already off to a good start, and there are many more months of reporting to come. Once Governor Doug Ducey signed legislation in April 2021, and updated tribal gaming compacts, state budget analysis estimates said that the new industry would bring over $15 million a year in taxes.
Proponents of sports betting and industry insiders felt that the number would be much higher. Representative Jeff Weninger, the sponsor of sports betting legislation, said that the totals could reach $100 million per year.
If the totals continue to be around the same in January 2022, the state will earn just over $22 million in taxes. This would be higher than the budget estimates but lower than other figures, such as that by Rep. Weninger.
One aspect to consider is free bets. The state has an 8% tax on retail sports betting and 10% on mobile. In January, operators gave away over $20 million in free wagers which cut down on the amount subject to taxes.
Operators will be able to offer free bet credits for a few years before they are phased out. The free bets will end after the 6th year of operation. In the first two years, the free bets start at 20% gross receipts and then decrease to 15% and 10%.
