The Arizona Department of Gaming reported sports wagering handle totaling $591.2 million for the month of January on Monday, completing a record-setting month nationwide in handle, revenue, and state tax revenue generated.
Arizona is usually the last to report figures for a given month, which meant the Grand Canyon State was merely putting the finishing touches on a month unlike any other in the post-PASPA era that started in June 2018. The national handle for the opening month of 2023 was $11.5 billion, with the increase from December’s short-lived record of $10.6 billion largely attributed to Ohio‘s Jan. 1 launch.
Prior to any deductions being taken, Arizona sportsbook operators reported $47.5 million in gross revenue, which was then reduced to $46.2 million when accounting for the federal excise tax and operator losses. After promotional credits and free bets were deducted, the state was eligible to tax $29 million in adjusted gross revenue, bringing $2.9 million into its coffers.
The nationwide gross operator revenue for January was $1.07 billion, the first monthly total in the post-PASPA era to surpass $1 billion. In terms of operator performance, the house picked up where it ended 2022 to start the new year. The national hold on gross revenue for January was 9.3% — slightly below December’s 9.5% win rate, but easily outpacing what now feels to be an outdated industry standard of 7% given the shift in the marketplace, with operators emphasizing parlay wagering.
State tax revenue totaled $190.2 million for January, with New York and Ohio accounting for more than half that haul. Seven other states collected $5 million or more in receipts to begin the new year, with tax revenue running $61 million ahead of January 2022.
FanDuel humming along as revenue boss
FINAL January 2023 Top 10 #SportsBetting handles by state:
1 New York ~$1.8B
2 Ohio $1.11B
3 New Jersey $1.08B
4 Illinois $1.07B
5 Nevada $935.8M
6 Pennsylvania $772.3M
7 ARIZONA $591.2M <-NEW
8 Colorado $547.2M
9 Virginia $513.2M
10 Michigan $490.9M#GamblingTwitter— Chris Altruda (@AlTruda73) March 27, 2023
Arizona’s handle was up 3.3% compared to the $572.5 million in accepted wagers for December and 4.9% higher compared to the $563.7 million handle to open 2022.
With the hold on gross revenue down 1.7 percentage points from December, revenue slid 14.6% from the previous month. The year-over-year numbers were more positive, with gross revenue 17.2% higher this year and the win rate up eight-tenths of a percentage point.
Still the only mobile sportsbook to surpass $20 million in monthly gross revenue in Arizona, FanDuel cleared that benchmark for the fourth straight month, eclipsing $21 million thanks to a 10.8% hold on $195.5 million handle. It was the seventh consecutive month the online titan had a double-digit win rate. Its adjusted revenue of $14.8 million, however, was down 3.8% versus December as its promotional spend was $400,000 higher at $5.8 million.
BetMGM also continued to be a formidable house against the public, posting its seventh monthly double-digit hold in a row. Its 10.5% win rate resulted in $9.5 million in gross revenue, easily outdistancing DraftKings for second in that category. DraftKings generated $8.8 million in gross revenue, but was a clear No. 2 for handle at $171.4 million.
January also saw a reversal in terms of promotional spend between DraftKings and BetMGM. The latter, which is usually more aggressive in providing credits to bettors, had a 40.8% decline in spend from December to $3.8 million. Meanwhile, DraftKings’ total promotional offers surged 47% to $5 million, its most since a $7.3 million outlay last September.
Desert Diamond was an unexpected interloper for the No. 4 spot in mobile revenue, posting more than $2.8 million in gross revenue thanks to a 14.1% hold on a record monthly handle of just over $20 million. The book had $28 million handle for all of 2022 following its February launch, and January’s gross revenue exceeded its $2.5 million haul for all of last year.
It was enough to relegate Caesars Sports to fifth for revenue while nearly overtaking Barstool Sportsbook for fifth in handle, finishing within $380,000 of the PENN Entertainment sportsbook. Caesars was a comfortable fourth in handle with $59.2 million in accepted wagers. Barstool reported $1.2 million in gross revenue, its third straight month in seven figures.
Turf Paradise stumbles out of the retail blocks
All-time Top 10 #SportsBetting handles post-PASPA (Feb in CAPS)
1 NEW JERSEY $35.7B
2 Nevada $30.4B
3 PENNSYLVANIA $20.3B
4 NEW YORK $19.9B
5 Illinois $18.7B
6 INDIANA $11.3B
7 Colorado $10.8B
8 MICHIGAN $9.8B
9 Virginia $8.7B
10 Arizona $8.4B (Jan.) <-NEW#GamblingTwitter— Chris Altruda (@AlTruda73) March 27, 2023
Of the retail venues throughout the state, three finished in the red to kick off 2023. Turf Paradise took the largest hit of the trio, paying out $41,360 on top of its $450,000 handle. Caesars’ books at Chase Field and Ak-Chin Casino posted a combined loss of $36,493 from $921,000 wagered, while Midtown Tavern Sports Bar & Grill — which ranked third overall in retail handle among limited event operators at $97,000 — finished $3,552 in the red.
Retail gross revenue totaled $423,335 from $5.8 million handle, resulting in a 7.3% hold. FanDuel’s retail book at the Footprint Center had an 11.4% hold on close to $2.5 million handle, with the $281,502 in gross revenue its best month since September. Harold’s Restaurant in Cave Creek paced all limited event operators with $42,597 in gross revenue thanks to a 20.1% win rate.
