These departures come at a time when Arizona is opening applications for new sports betting licenses, signaling both an end and a new beginning in the state’s evolving sports betting ecosystem.
SaharaBets: A Short-Lived Venture
SaharaBets AZ, launched in January 2022 through a partnership with the NHL’s Arizona Coyotes, announced on July 9, 2024, that it would no longer accept wagers. This decision followed the sale and relocation of the Coyotes to Utah, which left SaharaBets without a necessary partner to operate in Arizona. According to state law, all licensed sports betting operators must partner with either a state sports franchise or a state tribe. The relocation of the Coyotes effectively rendered SaharaBets’ operations illegal under these regulations.
From the beginning, SaharaBets struggled to gain traction in Arizona’s competitive market. Despite the potential advantages of its partnership with the Coyotes, it remained one of the least popular sports betting platforms in the state. In April 2024, SaharaBets reported an online sports betting handle of just over $900,000, resulting in a modest $6,235 in sports betting tax revenue for Arizona. This performance starkly contrasted with the state’s total sports betting handle of $656.3 million for the same month, highlighting SaharaBets’ inability to capture a significant market share.
Meruelo Gaming, the company behind SaharaBets, announced the immediate cessation of its sports betting operations on social media and its website, advising customers to withdraw their funds by August 8, 2024. This announcement marked the end of a venture that, despite initial promise, never managed to establish a substantial foothold in Arizona’s sports betting market.
Betway: Profitability Concerns Lead to Exit
Betway, another significant player in the sports betting industry, also decided to exit the US market, including Arizona, due to profitability concerns. Super Group, Betway’s parent company, announced it would cease operations in the nine states where it was active, which included Arizona. CEO Neal Menashe explained that after an extensive review, the company concluded there was no long-term path to profitability for its sportsbook product in the US.
Despite being active in nine states, Betway struggled to maintain a sustainable business model amidst fierce competition and high operational costs. Earlier this year, Betway had already allowed its Massachusetts sports betting license to lapse, indicating deeper underlying issues. While the company will continue to offer its iGaming services in New Jersey and Pennsylvania, its departure from sports betting underscores the challenging nature of the US market.
Arizona’s Open Applications: A New Dawn
Concurrent but unrelated to the exits of SaharaBets and Betway, Arizona’s Department of Gaming (ADG) has opened applications for new AZ sports betting licenses. Between July 8 and July 19, 2024, the ADG will accept applications for at least one license reserved for Arizona tribes and another for Arizona sports teams. This move aims to fill the void left by the departing operators and maintain a dynamic and competitive sports betting market in the state.
Arizona’s sports betting handle of $656.3 million in April 2024, up 14% from March and 22.5% from April 2023, illustrates the market’s robust growth potential. The state collected $4.3 million in privilege fees, highlighting the economic benefits of a thriving sports betting industry. The open application period presents a valuable opportunity for new entrants to establish themselves and contribute to this burgeoning market.
