Arizona Poised To Reopen Sports Betting License Application Process

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An aerial view of Salt River Fields at Talking Stick on April 7, 2021 in Scottsdale, Arizona. Christian Petersen/Getty Images/AFP

The sports betting competition is about to get tougher out west. Arizona Department of Gaming (ADG) recently announced that it will reopen its licensing process for Arizona sports betting operators. 

Between July 8 and July 19, companies can apply for event wagering licenses. The state will issue licenses for both Arizona tribes and Arizona sports teams. Arizona has 17 out of a maximum of 20 sports betting licenses allocated, with eight tied to sports teams and nine to tribes. 

In Arizona, event wagering operators must be tethered to a professional sports franchise or Indian tribe. During the initial licensing phase in September 2021, tribal licenses were fully allocated.

Over the past two-and-a-half years, as operators like Fubo, WynnBET, Unibet, and TwinSpires exited the market, some slots reopened and were reassigned.

Prime Sportsbook is expected to be one of the operators looking to break into The Grand Canyon State.

Licensing Fees and Competition Are Steep

If they do, they better bring their wallet. Prospective operators must pay a $100,000 fee for application processing and consideration. If approved, the company pays a $750,000 initial licensing fee.  

Newcomers who get into the Arizona market won’t have it easy. They will have to compete with the likes of bet365, Caesars, BetMGM, FanDuel, Hard Rock, and DraftKings for market share.

FanDuel and DraftKings dominate nearly 70% of the market. FanDuel leads in both handle and gross gaming revenue. Recent newcomers have also made an impact: bet365 ranked fifth with a little more than $29 million, and ESPN Bet came in sixth with a nearly $27 million handle in March.

Arizona Market Oozing With Revenue Potential

But there is reason for optimism. Arizona sports betting hit a record in March with approximately $760 million in wagers. Arizona is also one of 11 states to surpass $1 billion in gross operator sports betting revenue and one of nine to record more than $16 billion in all-time sports betting handle.

The state is adjacent to California, an untapped online sports betting market. Meanwhile, New Mexico restricts game wagers to in-person tribal betting. Out-of-state residents can easily use an Arizona sports betting app by crossing the state line.

On top of all of that, Arizona’s mobile sports betting enjoys a low 10% tax rate, making it an attractive proposition for potential licensees.

What Is Expected To Happen With the Available Licenses

It is more likely that any operator that wants to get into the state will partner with a tribe. It’s partly because all of the professional teams in Arizona are already dancing with someone else. 

The NFL Arizona Cardinals (BetMGM), NHL Arizona Coyotes (SaharaBet), MLB Arizona Diamondbacks (Caesars Sportsbook), AFL Arizona Rattlers (BetRivers), WNBA Phoenix Mercury (Bally Bet), Phoenix Speedway (ESPN Bet), NBA Phoenix Suns (FanDuel) and TPC Scottsdale (DraftKings) are all licensed.

But when event wagering first went live in Arizona, all 10 licenses were issued and many tribes were left without. Since then, several tribes have lost partners due to market consolidation and other factors.

That’s why the experts expect at least one operator to partner with a tribe. The application window will close at 5 PM local time on July 19th. We’ll keep you posted.