In November 2023, Arizona sports bettors set a new record for online sports betting, surpassing previous highs in their enthusiasm and participation. The state’s licensed sportsbooks received over $713.5 million in bets during the month, the highest amount ever wagered in a single month in Arizona. This surge in betting was likely fueled by significant interest in NFL games and other sports markets.
Record-Breaking Betting Activity in Arizona for November
The Arizona Department of Gaming’s report for November 2023 revealed a notable milestone: the total bets placed surpassed the previous record of $690.9 million set in March 2022.
This marked a 13.6% increase over the betting volume in November 2022 and pushed the total for the current fiscal year to $2.6 billion, an 8.7% rise from the same period in the previous fiscal year. While this high volume indicates active engagement, it’s important to note that much of this betting was redistributive, transferring funds between bettors.
Decrease in Revenue for Arizona Sportsbooks
Despite the record betting volume, November 2023 saw a dip in revenue for Arizona sportsbooks. The gross win for the month – the difference between total bets and player payouts – was over $42.3 million, constituting about 5.9% of the total bets. This figure was down 24.4% from the gross revenue in November 2022.
Consequently, the state’s tax revenue from these activities, just over $2 million, fell by 47.8% compared to the previous year. Overall, for the first five months of the current fiscal year, sportsbooks’ gross win was $226.3 million, a slight increase from the previous year, but tax revenue decreased by around 5.7%.
Increased promotional spending by sportsbooks, deductible from taxable revenue under Arizona law, played a significant role in this revenue decline. With Arizona reopening its license application process for two more sportsbook licenses, promotional activities are expected to surge, potentially impacting short-term tax revenues.
Implications of Rising Promotional Spending and Licensing Expansion
The record betting activity in November was significantly driven by promotional spending by sportsbooks. As Arizona expands its licensing, inviting more players into the market, this trend is likely to continue, potentially affecting sportsbooks’ profit retention.
Arizona’s sports betting landscape experienced a significant shift in November 2023, with record-breaking wagering volumes. However, this surge in betting activity didn’t translate into proportional revenue gains for sportsbooks or the state, largely due to increased promotional spending and the redistributive nature of betting. The ongoing developments in licensing and market dynamics will continue to shape Arizona’s sports betting industry in the coming years.