The landscape of legal sports wagering in Arizona continues to evolve as the Arizona Department of Gaming (ADOG) has recently conducted another significant licensing round. In an effort to fill the limited group of 20 licensure spots, half earmarked for tribal casinos and the other half for professional sports venues or franchises, the ADOG opened their application window in February seeking to award at least one more professional sports franchise license, as well as one tribal license.
Despite the push, the ADOG has remained silent on whether any new professional sports franchises have entered the fold. Previously, no professional teams stepped forward during the initial rounds of licensing, and to this day, two pro franchise licenses have yet to find a home. Currently, eight sports franchises have received licenses, yet it seems unlikely that others will come forward, as almost all eligible entities have already been licensed.
The tribal casino side paints a different picture, with the maximum of 10 licenses already allocated. This leaves a minimum of six tribes without the opportunity to engage in sports betting under their purview. August of last year saw the ADOG granting a license to Bet365, paired with the Ak-Chin Indian Community. This partnership was crucial for the community, particularly when their prior affiliate, Fubo Sportsbook, discontinued operations in 2022. Bet365 responded to this partnership with a launch that occurred in February.
Zooming out to Fanatics Betting & Gaming, the situation is considerably different. Just a year ago, the Fanatics digital platform was operating in only a modest handful of states. That all changed with the acquisition of PointsBet’s business in North America. Undergoing sizable rebranding and expansion, Fanatics Betting & Gaming has proliferated across the nation and is now operative in 16 states. These states, which include Michigan, New York, North Carolina, Ohio, and Pennsylvania, are notable for not only adopting legal sports betting but also for their significant market sizes.
Arizona has seen a prosperous climate for sports betting operators, a fact underscored by the recently released sports betting revenue report. Dated March 12, the report details the transactions for January, setting new records for the state. The activity spanned across 16 live operators and culminated in an impressive $706.4 million in wagers. Subtracting promotional deductions, these operators saw an adjusted gross revenue of $46.2 million. From that total, the state of Arizona benefited from a tax payment totaling roughly $4.6 million.
The competitive licensing process underscores the regulatory challenges and opportunities present in the emerging sports betting market in the United States. Arizona’s approach to allocation, splitting the number of licenses between tribal entities and professional sports franchises, aims to balance the interests of different stakeholders while also fostering a diverse betting landscape.
With the success of sports wagering in Arizona, there is an ongoing discussion surrounding the availability and leverage of licenses. The remaining unclaimed professional franchise licenses represent potential growth avenues for the industry, yet seem to grapple with a lack of appetite from further professional sports entities within the state. This introduces a period of reflection and strategy for the ADOG and potential licensees, as the dynamics of sports betting continue to unfold nationally.
In the meantime, operators like Fanatics Betting & Gaming are experiencing substantial growth, and markets like Arizona continue to set records within the industry. With the tax revenue proving to be a significant income stream for the state, the expansion and robust participation in sports betting demonstrate that the appetite for such entertainment remains high. As the regulatory landscape adapts, so too does the innovative spirit of the sports betting operators propelling this multi-billion-dollar industry forward.
