The Arizona Department of Gaming reported $851.3 million in sports betting handle for September, putting a cap on national numbers for the month that were good but paled in comparison to last year.
Wagering in the Grand Canyon State was up 16.3% year-over-year, with September’s total the fourth-highest in state history. Arizona continued to outperform neighboring Nevada, another example of the state’s drawing power via mobile betting considering the NFL season is when the Silver State shines as a destination for bettors.
Gross revenue, however, was a different story as it plunged 25.3% to $57 million before deductions for promotional play and the 0.25% federal excise tax. The 6.7% statewide hold was the second sub-7% hold in the last seven months but better than March’s year-low 5.7% win rate.
The state was able to levy taxes on a mere $19.6 million in adjusted gross revenue and re-directed $1.9 million to its coffers. The 34.3% ratio of AGR to gross revenue was the lowest reported by the Arizona Department of Gaming since a 23.4% ratio in June 2022. That month’s ratio was impacted by the state’s all-time low monthly hold of 3.8%.
The promotional arms race continues
Arizona is a business-friendly state between its low tax rate on revenue (8% retail; 10% mobile) and the ability to deduct promotional spend against gross revenue. The collective outlay of $35.4 million in credits and bonuses was down 6.2% year-over-year and second only to the previous September spend of $37.7 million.
FanDuel and DraftKings were, unsurprisingly, at the top of the list in offers with $12.4 million and $11.3 million, respectively. In a month where bettors fared better than usual, those spends accounted for more than 50% of their gross revenue. In the case of DraftKings, it was 72.8%, as it finished with $15.5 million in winnings on a 5.8% hold from $268.2 million handle.
FanDuel’s promotional spend equaled 57.7% of its $21.5 million haul as it landed on an 8.4% win rate from $254.5 million in accepted wagers. Both operators had double-digit downturns in year-over-year revenue as their respective win rates slid at least four percentage points.
The next large tranche of promotional spend came from the usual suspects in BetMGM ($3.5 million), bet365 ($2.7 million), and Fanatics ($2.3 million). The other seven mobile sportsbooks who were able to deduct promotional spend against gross revenue had a combined $3.2 million outlay.
BetMGM easily holds the no. 3 handle spot
Though Fanatics has made in-roads to the handle podium in large-market states including Illinois, Pennsylvania, and Massachusetts, BetMGM is not willing to go quietly into the desert night and cede that spot here.
The $97.7 million reported for September handle was up 14% from last year and came despite a 14.3% pullback on credits and bonuses. The increase led to a softer revenue decline of 15.6% to $7.6 million as BetMGM’s hold dipped 2.7 percentage points to 7.7%.
England-based bet365 did not report any adjusted revenue for the second consecutive September in Arizona as it finished with a 4.8% hold in collecting $2.9 million in gross winnings from $60.3 million worth of wagers. Its promotional spend was at least $2.7 million after the federal excise tax — the Arizona DoG only reports promo spend that equals 100% of gross winnings. That was similar to September 2024 when its reported outlay was $2.8 million.
Fanatics reported no taxable winnings for September, having also done so in March. The common denominator in both months was strong bettor performance as it was limited to sub-4% holds each time. Fanatics attained a 3.4% win rate in September, claiming $2.5 million in gross revenue from $73.1 million handle.
Someone has to finish last for hold
Arizona’s 6.7% collective win rate on gross revenue for September was the lowest among the 32 states that publish handle and revenue figures, and it was one of only four states where sportsbooks failed to reach the 7% industry standard.
It was 1.6 percentage points below the 8.3% hold achieved nationwide on $14.94 billion handle as operators reported $1.24 billion in gross winnings. Those figures do not include Tennessee handle and Nebraska revenue: The former does not collect revenue data since it taxes handle, and the latter does not publish monthly handle figures.
Though one could term September a solid month for the house, it was dramatically inferior to last year, when operators ran wild on the public. Thirty of the 32 states had double-digit holds in 2024 compared to seven this year, and the lowest win rate of the group in 2024 was Colorado at 9.8%.
When including Tennessee and Nebraska figures, nationwide handle increased 10.7% to $15.51 billion, but gross revenue shrank by 18.5% to $1.24 billion. That 8.3% hold was nearly three full percentage points lower than last year, which ranked third-highest at the time. The downturn in revenue also impacted tax receipts as the $283.4 million collected was down 9.4%.
