According to the most recent report from the local Department of Gaming, sports bettors in Arizona were very busy in October as evidenced by the $648.2 million in accepted wagers, the second-highest amount in the state’s 26-month sports betting history.
World Series Boost
March 2022 still holds the record for Arizona’s highest handle in its two-plus years in the bookmaking business at $691 million. However, the $648.2 million worth of bets in October 2023 draws the historic total closer to eclipsing the $13 billion mark since mobile sports betting launched in September 2021.
World Series wagering in October propelled Arizona’s sportsbooks to lofty heights and its October handle claimed the No. 7 spot nationally, nestled between No. 6 Ohio ($747.66 million) and No. 8 Virginia ($571.35 million).
The handle after 10 months in the Grand Canyon State has climbed to $5.17 billion which is up 14.3% from last year at the same time while the gross revenue is up $14.6% to $447.4 million. Compared to last October the handle was up over 5.1% while sportsbook operators claimed $56.9 million in gross revenue before state taxes and promotional deductions.
Arizona sportsbooks sent $3.3 million to the state after $22.5 million in write-offs for signup bonuses and promotional discounts were applied. Arizona retail sportsbooks pay an 8% fee on adjusted gross revenues while the mobile platforms are taxed at 10% of their AGR.
DraftKings Rules the Desert
It was a photo finish for handle supremacy in October between Boston-based DraftKings and the ubiquitous FanDuel. DraftKings accepted $220.6 million in wagers while FanDuel trailed ever-so-slightly with $220.3 million.
DraftKings posted a hold, or win rate, of 10.2% which generated $22.5 million in gross revenue while FanDuel fell below double digits for the first time in three months with a 9.2% hold, producing $20.2 million in gross revenue.
The other top books in October were BetMGM Sportsbook Arizona ($90.5 million), Caesars Sportsbook Arizona ($59 million), and Penn Gaming/Barstool Sportsbook ($13.8 million).
Not Enough
Some critics of Arizona’s sports betting legislation believe the tax rate is not high enough while the write-offs for the sportsbooks are far too generous.
“It should be bringing in $50 million a year in receipts to the state. But it’s not even close to that because they get to write off all these free bets,” grumbled Will Humble, Executive Director of the Arizona Public Health Association and a staunch critic of the law.
However, the signup bonuses and promo write-offs are standard fare in the sports betting industry, strategically enticing customers to sign up with a reduced risk of losing. Wooing customers to one’s site and getting early adopters onboard is the universal strategy for a short-term loss generating long-term profits.
But Arizona is unique in that many states sunset those write-offs after a sportsbook has been operating for one year while Arizona allows its platform providers a five-year staggered reduction until it is gone for good in 2028.
