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Window to apply for gambling licenses in Arizona closing soon
Sportsbooks have until July 19 to submit applications.
Arizona is in the market to add to their already expansive list of sportsbooks. The state announced that they will accept applications for event wagering licenses from July 8 through July 19. In order to be considered for a new license, all applications must be submitted by 5:00 p.m. on Friday, July 19. The Arizona Department of Gaming will accept applications for no less than one event wagering license reserved for the state’s federally recognized Native American tribes and no less than one event wagering license reserved for Arizona sports franchises.
At the moment, Arizona has 15 sportsbooks with active licenses. The state lost two sportsbooks recently: Betway left the state after the company announced they were leaving the U.S. market, and SaharaBets shut down operations after the Arizona Coyotes NHL franchise moved to Utah. Arizona can allocate a maximum of 20 licenses under state guidelines, meaning there’s currently more supply than demand for these licenses.
Recent changes in Arizona
When Arizona first legalized sports betting in 2021, they maxed out the allocation of 20 available licenses. However, in recent years, there have been plenty of changes involving operators and the industry as a whole. This has led to some of those spots becoming open and others being reassigned.
In addition to Betway and Sahara, operators such as FUBO, Unibet, TwinSpires and WynnBet have left the market. bet365 took Fubo’s license and Barstool Sportsbook was renamed ESPN BET. In March, Fanatics Sportsbook was issued a license to bring the total of operators to 17 at the time, before the recent departures brought the number down to 15.
Arizona awards 10 licenses to professional sports franchises and 10 licenses to Native American tribes. Currently, three licenses are available for sports franchises while two licenses are available to local tribes. Any sportsbook operator that wants to accept bets in the state must partner with either a sports franchise or a local tribe.
Arizona is an enticing state for operators
While the sportsbook operator market in Arizona might appear oversaturated, there’s good reasons why all of these companies are willing to give Arizona a chance.
More than $17 billion worth of sports bets have been placed in the state since their launch in 2021. That’s seventh best in the country behind only New York, New Jersey, Nevada, Illinois, Pennsylvania and Colorado. As of July 1, Arizona is just one of eight states to earn more than $1.4 billion in sports betting revenue. There’s no sign of a slowdown either, with April 2024 showing a 23% increase in betting handle compared to April 2023.
Arizona also benefits from its geographical location, as California borders it. Of course, California has yet to legalize sports betting so any potential sports bettors in the state could theoretically travel to Arizona to find action. Neighboring states such as Colorado and Nevada are powerhouses in the sports betting industry.
Arizona’s 10% tax rate is amongst the lowest in the nation, meaning operators get to keep a higher percentage of their profits. The low tax rate makes Arizona an extremely appealing market.
Challenges new Arizona sportsbook could face
While there are certainly plenty of positives to the Arizona market, there’s also a growing list of concerns. A bunch of operators have already tried to gain market share in the state, failed, and then closed up shop.
An initial investment is required to acquire a betting license in Arizona. Operators are charged a $100,000 application fee. Arizona law stipulates a $750,000 license fee if the operator is approved as well as a $150,000 annual fee. That’s $1 million in expenses right off the jump.
Despite the fact that the state is accepting new applications for licenses, the Arizona sports betting market is already established. They were one of the first states to legalize sports betting after the repeal of PASPA.
As a result, industry titans FanDuel and DraftKings own about 70% of the market in the state. Only four other operators had monthly handles over $20 million in March (Caesars, BetMGM, ESPN Bet and Bet365). When you combine the market share of those six sportsbooks, they account for over 96% of the bets placed in the state.
