Arizona showed few signs of a sophomore slump in its second full year of legal sports wagering, further solidifying itself as one of the nation’s top markets after the state’s Department of Gaming on Friday reported handle totaling $358.9 million for August.
The Grand Canyon State has accepted $11.7 billion worth of wagers since accepting its first bets in September 2021, trailing only Illinois for the highest handle in the post-PASPA era in a state’s first 24 months of legal wagering. Arizona did have the luxury of launching after the COVID-19 pandemic, which dramatically impacted multiple months in 2020 for other states. It also was the beneficiary of a robust mobile betting market — something not all states had at the time of their respective launches.
The following table compares states’ handles in their first two years after launch.
The handle for August was the fifth-lowest in state history and down 0.6% compared to the same month last year. Gross revenue totaled $31.7 million, down 12.7% from August 2022, as the 8.8% hold was 1.2 percentage points less than August 2022 and two percentage points less than July.
After counting deductions and promotional credits, the state was able to levy taxes on $21.4 million in adjusted gross revenue, resulting in a tax inflow of more than $2.1 million to the state. The $3.9 billion handle in the 2023 calendar year is up 5.9% versus the first eight months of 2023, but gross revenue is up 28.6% in that same span to $330.4 million, as the nearly 8.5% win rate is almost 1.5 percentage points better than 2022.
Across the board growth
FINAL August Top 10 #SportsBetting handles by state:
1 New York $1.12B
2 New Jersey $725.8M
3 Illinois $676.1M
4 Nevada $431M
5 Pennsylvania $393M
6 Ohio $379.5M
7 ARIZONA $358.9M
8 Virginia $319M
9 Massachusetts $314.9M
10 Maryland $263.7M#GamblingTwitter— Chris Altruda (@AlTruda73) October 13, 2023
Arizona’s second year of sports wagering was aided by the novelty of hosting the first Super Bowl in a state with legal wagering in February, but the overall picture showed solid growth from Year 1 to Year 2. Handle the last 12 months of betting was up 15.1% to $6.25 billion, while gross revenue climbed 32.1% higher to $546.6 million.
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The state was also able to levy taxes on a higher percentage of revenue over the past 12 months, with the $351.2 million in adjusted gross revenue representing 64.3% of total gross revenue. The percentage for the first 12 months was barely over 50%, and Arizona has collected close to $13.8 million more in taxes –$35 million from September 2022 through August — versus Year 1.
FanDuel inching close to 10% hold
Running 2023 YTD Top 10 #SportsBetting handles by state (thru Sept in CAPS)
1 NEW YORK $13B
2 Illinois $6.69B
3 New Jersey $6.47B
4 Nevada $4.87B
5 Ohio $4.54B
6 Pennsylvania $4.27B
7 Arizona $3.91B
8 Virginia $3.23B
9 Colorado $3.17B
10 MARYLAND $3.02B#GamblingTwitter— Chris Altruda (@AlTruda73) October 13, 2023
Arizona is one of the few states where handle and revenue numbers by mobile operator are available in which FanDuel is not maintaining a 10% hold in the 2023 calendar year. It is not from lack of effort, but the three months FanDuel has fallen short of that mark has seen it fail to reach 9%.
August was closer to normal for the online juggernaut as it crafted a 10.9% win rate on $115.1 million handle, claiming $12.5 million in gross revenue. That nudged FanDuel’s year-to-date hold to 9.9%, with $140.5 million in revenue on $1.42 billion worth of wagers.
DraftKings edged out FanDuel for the top handle spot by less than $500,000, but its more pedestrian 8.4% hold resulted in gross revenue totaling $9.7 million. That is roughly in line with its overall 2023 hold of 8.3%, having won $92.1 million from bettors who have generated $1.11 billion handle.
BetMGM actually has more double-digit holds than FanDuel in Arizona this year, cracking 10% for the sixth time after fashioning a 10.1% win rate to keep $5.1 million of the $50.5 million wagered. Though BetMGM has slowed its promotional spend compared to last year, there was a notable uptick from July as credits surpassed $2.3 million. BetMGM’s $113.6 million total outlay in Arizona since launch is the most of any mobile book.
Caesars Sports rounded out the “Big 4” in unspectacular fashion, posting a 7.1% hold to claim $2.4 million in revenue from $33.6 million worth of wagers. Tucson-based Desert Diamond wrested back the No. 5 spot for handle from Barstool Sports with more than $15.3 million handle, but bettors limited the local outfit to a sub-1% hold and less than $142,000.
PENN Entertainment’s Barstool, whose handle nearly reached $11 million, had a 5.2% hold to claim more than $567,000 in gross winnings. BetRivers was the lone mobile book to post a loss on gross revenue in August, paying out more than $61,000 on top of the $3.8 million worth of accepted bets. It was the second losing month overall for BetRivers, which finished close to $70,000 in the red in December.
