The Arizona Department of Gaming has released the first revenue figures from expanded gambling in the state authorized by Gov. Doug Ducey in April.
Specifically, the state’s regulatory body posted numbers generated by legal daily fantasy sports in the Grand Canyon State.
Arizona collected just under $1,600 in tax revenue during the first four days of fantasy sports contests after they launched in August.
It is important to note that this is a very small sample size. The report is based on revenue generated by fantasy sports wagering Aug. 28-31.
So while the number may seem small, it at least provides even the smallest indication how much money is coming in from daily fantasy sports. And at the same time, it can provide us with a look and what the sports betting revenue report could look like when it’s released in a few weeks.
How daily fantasy sports are impacting Arizona
According to the ADG report, all fantasy sports contest operations combined to create $1,581.11 in tax revenue for Arizona.
The state’s data showed that DraftKings and FanDuel each collected around $75,000 in fees for Arizona fantasy sports during those four days. Below them, FFPC collected $25,000, and Yahoo Fantasy Sports reported about $600. Each operator offering DFS in the state must pay a 5% tax on their profits, which brings us to that total of over $1,580.
| DFS Operator | In-State Entry Fees | Adjusted Revenue |
|---|---|---|
| DraftKings | $75,715.15 | $ - |
| FanDuel | $73,516.00 | $7,137.95 |
| FFPC | $25,835.00 | $24,484.28 |
| Yahoo | $608.25 | $ - |
| Total | $175,674.40 | $31,622.23 |
Let’s put this into some perspective: Over the four days, Arizona generated around $395 per day on fantasy sports. If you use that number to come up with an estimate, it would come out to about $11,850 over 30 days. That’s around $144,175 over the course of a year.
Those estimates are based on revenue from a small four-day sample size when fantasy sports wagering became legal in Arizona. However, that does not take into account the projected increase in daily fantasy users.
DraftKings, FanDuel projected to lead way in AZ sports betting
Arizona is expected to make significantly more money from sports betting, which went live about two weeks after fantasy sports. The ADG noted that it intends to release the first revenue figures for the industry in late November. However, the fantasy sports revenue report provides a glimpse at what we could see once sports betting numbers are released.
The popularity of both DraftKings and FanDuel in the daily fantasy world should carry over into the sports betting market. That, of course, and each brand’s quick rise in the regulated wagering landscape across the country. Both operators launched betting apps in Arizona on Sept. 9 — the day sports betting launched in the Grand Canyon State.
That said, you cannot overlook the prominence of BetMGM and Caesars. As both stand as respected and well-established sportsbooks, and their affiliation with world-renowned casino enterprises, each brand could challenge both FanDuel and DraftKings Sportsbook for early Arizona supremacy.
Where Arizona sports betting revenue goes
As of now, the current plan sends all daily fantasy and sports betting revenue in Arizona to the state’s general fund. Meaning, it will be up to lawmakers to battle it out over how to allocate the money.
PlayAZ estimated that AZ sportsbooks will produce over $3 billion in annual handle, potentially resulting in over $10 million in yearly tax revenue.
We have to wait until late November to see how legal sports betting has fared so far. But even with a small sample size, it is easy to estimate that fantasy sports will at least play a minor role in the state’s financial growth.
