Arizona Sports Betting Revenue Projections
Arizona is pushing towards a sports betting launch date of September 9, 2021. With US sports betting revenue soaring across the country in 2021, find out why the Grand Canyon State figures to be a top new market. Let’s take an in-depth look at Arizona sports betting revenue projections.
AZ Market Overview
To understand the potential of the Arizona sports gambling market, here’s some important context.
State Population (2020 Census): 7,151,502
In-state Pro Teams: Arizona Cardinals (NFL), Arizona Coyotes (NHL), Arizona Diamondbacks (MLB), Phoenix Suns (NBA), Phoenix Mercury (WNBA)
Expected Launch Date: September 9, 2021
Biggest Monthly Revenue: TBD
Regulator: Arizona Department of Gaming
Platforms: Online and retail (launch pending)
Tax Rate: TBD (8 percent minimum)
Arizona Sports Betting Revenue Expectations: What Does the State Government Think?
Analysis from the Arizona State Legislature provides insight into how much money the government thinks it can generate via legal sports betting. In a Fiscal Note supporting House Bill 2772, government analysts projected a total annual sports betting revenue of $15.2 million by 2024, all of which will be funneled into the state’s General Fund, minus 10 percent in administrative costs.
Legislators based their estimated fiscal impact on a minimum tax rate of 8 percent on operators’ net sports betting revenue and an annual licensing fee of $150,000 per operator (total of $4.1 million after admin costs).
Furthermore, the state used data from four other states (Iowa, Indiana, Pennsylvania, and West Virginia) from July 2020 to December 2020 to predict an annual revenue per capita of $20.80. Multiplying this figure by Arizona’s population provided an estimated taxable revenue of $154.4 million annually once the market is fully operational. At a tax rate of 8 percent, this would result in $11.1 million in state tax revenue.
Second Opinion: Arizona Market Is Bigger Than Legislators Think
An annual sportsbook revenue of nearly $155 million is nothing to scoff at. In 2020, that would have been the fourth-highest revenue of any state. Plus, lawmakers will be thrilled to recoup millions back into state coffers.
However, using our own revenue analysis from the four states mentioned above, it’s possible the Arizona Legislature may have underestimated its sports betting revenue projections. The sports wagering markets in Iowa, Indiana, and Pennsylvania are growing rapidly, significantly outpacing the extrapolated 2021 revenue in Arizona’s report.
Furthermore, recent launches in similarly sized markets such as Tennessee and Virginia would suggest Arizona sports betting revenue could be higher than what the state government is expecting in the market’s first year, let alone by 2024.
Here’s a look at Tennessee’s total reported financial figures six months after launching in November 2020.
|Total Handle||Revenue||Hold Percentage||State Tax Revenue||Tax Rate|
Keep in mind, Tennessee has a very similar population to Arizona but fewer pro sports teams (TN does not have an MLB or WNBA team, which AZ has).
Meanwhile, over on the East Coast, Virginia is off to an even hotter start. Here are the totals from VA’s first four months, beginning in late January 2021.
|Total Handle||Revenue||Hold Percentage||State Tax Revenue||Tax Rate|
With some quick mental math, you can see that doubling and tripling Tennessee’s and Virginia’s numbers so far, respectively, to predict each state’s revenue in their first full year gives you roughly $185 million for both. Therefore, if Arizona were to match the hot start we’ve witnessed with the latest two states to launch, sports wagering could generate nearly 20 percent more than they’ve accounted for in their analysis – in year one!
For what it’s worth, analysis by ArizonaCasinos.com projects the Grand Canyon State could generate $252 million in annual sports betting revenue at market maturity.
Once legal sports betting launches in Arizona, we’ll be tracking all the numbers right here at Sports Betting Dime. We’ll provide updated analysis as the reports start rolling in, but for now, suffice to say that Arizona looks to be a hot new sports betting market this fall.
Arizona Revenue: Advantages
Arizona’s biggest advantage in terms of its ability to generate sports betting revenue is that lawmakers will permit up to 20 licensed operators, and online betting will be live from the get-go. Furthermore, Arizona has a number of thriving tribal casinos, suggesting a warm attitude towards gambling in general.
The Grand Canyon State has a booming tourism industry, and Phoenix is known as one of America’s best sports cities. Plus, we should not overlook that Arizona will host Super Bowl LVII at Glendale’s State Farm Stadium in early 2023. The Super Bowl is a massive driver of betting volume, and you can bet Arizonians will be rushing to get in on the action when the Big Game returns to their home grounds.
Arizona Revenue: Possible Challenges
The most significant question mark we have that will affect Arizona’s betting handle, and in turn, its sports betting revenue, is what restrictions will be placed on college sports betting.
Arizona is home to several popular and successful college sports teams, including the Arizona Wildcats, Arizona State Sun Devils, and Grand Canyon Antelopes. It does appear like regulators are moving towards allowing bets on in-state college teams, which is good news, but it’s not yet finalized, and it’s possible prop bets won’t be permitted.
States that limit college sports betting in any way fail to capitalize on the immense pull of college football and tentpole events such as March Madness. Given the likelihood of alumni remaining in-state, not allowing wagers on local teams is a mistake from a revenue standpoint.
Until the Department of Gaming confirms the final rules, we consider the status of college sports betting as a possible challenge to Arizona achieving its full potential when it comes to sports betting revenue.
Latest AZ Revenue News
Here’s a quick rundown of the latest revenue-related news for Arizona.
June 2021 – The Arizona Department of Gaming confirms they are still on track for a September 9, 2021 target launch date. The state’s sports betting tax rate is yet to be determined, but the current bill outlines a minimum of 8 percent.
February 2021 – The Arizona Joint Legislative Budget Committee releases a Fiscal Note concerning House Bill 2772, the state’s sports betting bill. In it, the committee projects approximately $155 million in annual sports betting revenue by 2024.
Learn More About Betting on Sports in AZ and Beyond
As the Grand Canyon State gets set for its grand opening of legal sports wagering, be sure to check out our list of the best sportsbooks to bet with.
As we get closer to launch day, Sports Betting Dime will provide exclusive promo codes for top sports betting sites and all the latest updates regarding Arizona’s sports gambling rules and regulations.
To see how Arizona compares to other states, be sure to explore our state-by-state sports betting revenue tracker.