Legalized Sports Betting in Arizona Is a Huge Tax Win for the State

Written By Play AZ Editorial Team on March 15, 2022 - Last Updated on January 30, 2023
sports betting in Arizona

Sports betting has taken Arizona by storm.

After passing legislation early in 2021, Arizona enjoyed a successful rollout of online sports betting last fall, with several prominent operators and industry leaders at the helm. Now the early returns are in, and it’s a smashing success for the state so far.

The Arizona market appears ripe for online gambling with high betting volume and massive betting totals over the first three months. Revenue generation has turned into significant tax dollars, helping bolster the state economy.

Here is a closer look at sports betting in Arizona so far.

A Successful Rollout

Arizona online sports betting went live on September 9th, 2021, coinciding with the start of the NFL season.

Arizona received $291 million in bets upon its initial rollout in September, massively exceeding totals from states that proceeded it. For reference, New Jersey, one of the pioneers in online sports betting, did not exceed $290 million in wagers until its 10th month of legalized sports betting.

There is evident enthusiasm for sports betting in Arizona, and the market represents a significant opportunity for revenue generation and growth. There are also a few other factors that contributed to such a successful rollout.

One reason for increased betting activity during any launch can be attributed to intensive marketing campaigns and promotions that entice bettors with bonus wagers.

All of the state’s largest online sports betting operators, including DraftKings, FanDuel, BetMGM, and Caesars, incentivize new sign-ups by matching initial deposits or offering bonus bets of up to $1000. DraftKings and FanDuel frequently offer new customers betting options with significantly increased odds, allowing them to win big on their first bets.

Another key to Arizona’s opening was the timing. The NFL gets massive attention from sports bettors, so syncing the launch with the start of the season appears to have added an extra layer of intrigue and excitement.

While the start of football season is always a sports betting catalyst, it may have been further amplified by the early success of the hometown team. The Arizona Cardinals went an undefeated 4-0 in September, further bolstering betting enthusiasm within the local market.

Sports Betting in Arizona

Between September and November 2021, Arizona sportsbooks received 1.2 billion in wagers, including a whopping 466 million in November, indicating that enthusiasm for legalized sports betting is not slowing down anytime soon.

With the NFL playoffs and Superbowl in January and February, another boom for Arizona gambling can be expected once the early 2022 figures come in. Even after football season ends, there are plenty of other significant sporting events looming on the horizon that should drive high betting volume, including March Madness, The NBA Playoffs, and the Kentucky Derby, to name a few.

State Revenue & Taxes

The initial returns are a clear win for revenue generation in the state.

Through the first three months, sportsbooks reported nearly $119 million in revenue (calculated as the money kept after payouts). With tax rates ranging from 8-10% for retail and mobile betting, the State of Arizona has taken in over $4.2 million in taxes.

The coming months will include some key sporting events that correspond with higher betting volume and will yield additional tax revenue. Increased income from Arizona taxes will help contribute to the local economy and support essential services, including infrastructure, education, veterans groups, and other local government initiatives.

A Bright Future

Arizona has many positive things going on regarding the future trajectory of sports betting. With the 14th largest population in the country, Arizona has a thriving tourism industry and the 5th biggest metropolis in the country in Phoenix. There are multiple local pro sports teams, high-profile sporting universities, and lots of live sporting events. Arizona is also slated to host another Super Bowl in 2023.

While some states inevitably see regression after a successful rollout as consumers lose interest, there are already several well-established and successful tribal Arizona casinos suggesting a prolonged enthusiasm for gambling in Arizona that is unlikely to flicker out.

With over 20 sportsbooks licensed to operate in the state, another encouraging aspect is that even more sports betting operators are poised to become operational at the start of 2022, which will contribute to sports betting growth and ramp up new promotional activity.

Here to Stay

Arizona looks to be a compelling case study in justifying the legalization of online sports betting as a revenue generator with solid early returns.

As sportsbooks continue to gain a foothold in many states around the country, it will be interesting to track betting figures moving forward and see how they stack up with one another.

Check out all current local sportsbooks and get started with sports betting in Arizona today.

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