The next date of note is Aug. 29, when the Arizona Department of Gaming completes a review of the applications. While it does not appear that the agency will reveal the identity of the applicants, it is clear that if there are more bidders than licenses, another two-week window opens before final decisions are expected to be announced.
Approved online Arizona sportsbooks will pay a $750,000 licensing fee – with a refundable $100,000 of that total due with the sportsbook application.
The timing arrives amid an NCAA college football season that launches on Aug. 26. Two ranked teams are in action on that day – No. 13 Notre Dame faces Navy in Dublin, Ireland, and No. 6 USC plays host to San Jose State.
The first slate on NCAA football games is on Sept. 2, and the NFL holds its first regular-season game on Sept. 7, as the Detroit Lions visit the Kansas City Chiefs. The first full Sunday of NFL action is Sept. 10.
It all adds up to a less-than-ideal bit of timing for the newcomers to Arizona, as established sportsbooks in the state will be able to lure new customers with promotional offers before the winning bidders are even out of the starting gate.
But Arizona, along with Colorado, has proved to be one of the most appealing states west of the Mississippi River for sportsbook operators. In the long run, the unfortunate launch schedule will matter less and less – an efficient Arizona betting app with well-chosen promotions still will have an opportunity to succeed.
Years of negotiations with Arizona’s powerful Native American tribes led to the April 2021 signing of a bill into law by Gov. Doug Ducey that permitted up to 20 mobile sportsbooks in the state.
Of those 20 licenses, half would be awarded to state-approved tribes and their sportsbook partners, with the other half going to the state’s professional sports teams.
By the fall of 2021, 18 sportsbooks had launched in the state.
However, the Ak-Chin Indian Community’s sportsbook partner, Fubo Sportsbook, shut down its operations in October 2022. That license is the one now on the table on the Native American side of the equation, with the other two openings going to eligible sports franchises.
An ongoing question, however, is what other such entities are eligible, now that the Diamondbacks, Cardinals, Suns, Coyotes, Rattlers, and Mercury teams, as well as the Phoenix Speedway and TPC Scottsdale professional golf business, have been licensed.
According to Arizona’s sports betting law, licenses can only go to “pro teams playing at the highest level.”
On the one hand, the state has no franchise in Major League Soccer, the top-level league in the sport in the U.S. On the other hand, that means that the Phoenix Rising of the second-tier United Soccer League is playing “at the highest level” of soccer actually contested in the state.
The Rising were denied a license in the first phase of the approval process in 2021, but club executives have indicated that another bid was coming this month. The team does play in a venue with a 10,000-seat capacity, which is the minimum size to be considered for application.
The Turf Paradise horse racing track was denied a license two years ago, and indications are that the track owners have not reentered the fray this month. Two Tucson franchises – the Roadrunners (American Hockey League) and Sugar Skulls (Indoor Football League) – would not seem to qualify based on playing in an arena with just under 9,000 seats.
The most speculation in Arizona sportsbook chatter centers on Fanatics, whose recent purchase of Australia-based PointsBet’s American operations strongly suggests it will seek to do business in new states with significant populations, such as Arizona.
Bet365 already operates in Colorado as well as Ohio, New Jersey, and Virginia, so it is a plausible candidate, too. Nevada-based Circa Sports has launched in Colorado, so an application in Arizona would not be a far-fetched notion. Betr and Tipico also have been raised as possible bidders, so that Aug. 29 deadline could pass with further regulator review required to pick winners and losers.
Perils of Competition
The other interesting aspect of the timing of the new Arizona sportsbook approvals is that it will come on the heels of WynnBET just announcing on Aug. 11 that it was ceasing operations in Arizona as well as in seven of its 11 other jurisdictions (including in Colorado and New Jersey).
WynnBET typically placed well back in the pack of 16 rivals – and in spite of the high volume of options available to consumers, more than 80% of the business in the state has been divided among FanDuel, DraftKings, and to a lesser extent BetMGM.
The relatively low profit margins in the sportsbook business – the books occasionally even suffer collective net losses in a given month – has led to speculation of further consolidation in the industry as the “big fish” swallow up smaller ones to add an incremental number of gamblers to their portfolio.
WynnBET officials say they will maintain their mobile sportsbooks in Nevada and in Massachusetts, where the company also operates casinos (with New York and Michigan as states “under review” by WynnBET). That could be an indicator of how midsized casino companies will handle sportsbook operations down the road.