PHOENIX — Arizonans haven't stopped embracing the state's entry into legalized sports betting, plopping down $564 million in January wagers and winning back $522 million, the vast majority through online apps licensed to the state's pro sports teams and Native American tribes.
The monthly Department of Gaming report on results from the fifth month of legalized wagering on sports showed the 12 online operations and two brick and mortar sports books made just over $40 million after federal taxes.
But they gave away more than $20 million in free bets. That left just $19.6 million subject to state taxes, which totaled $1.9 million. The state levies an 8% tax on retail wagers and 10% on mobile app bets.
The free bet credits, which are designed to lure gamblers, phase out over several years. They start at 20% of gross receipts in the first two years and then drop to 15% and then 10% before ending in the sixth year.
The other betting legalized under the 2021 legalization, fantasy sports, saw $3.9 million in entry fees and profits before state taxes of $431,000. The state charges 5% on fantasy sports profits and brought in just over $21,000.
Fantasy sports betting launched in late August and full-on sports betting on Sept. 9.
Between the launch of sports betting and the end of the year, gamblers wagered more than $1.7 billion and the sports books made about $60 million in profit. That led to taxes paid to the state of $6.1 million.
Estimates vary widely for the amount of cash the state will take in under the legalized sports betting law, signed by Gov. Doug Ducey in April along with updated tribal gaming compacts. The Legislature's budget analysts estimated just over $15 million a year, while industry proponents put the number much higher. The bill sponsor, Republican Rep. Jeff Wininger of Chandler, at one point said it could be $100 million per year.
The newly legalized sports betting was part of a deal that allowed the state's Native American tribes to get 10 of the available licenses and professional sports teams to get the other 10. Tribes also greatly expand the type of gambling they can offer at tribal casinos.