We’re less than a month away from the official rollout of legalized sports betting in Arizona, transforming the way sports bettors there will wager on sports.
The start of legal sports betting in Arizona on Sept. 9 is the dawning of a new era for Arizona’s economy, according to Dennis Hoffman, professor of economics at Arizona State University’s W.P. Carey School of Business, generating upwards of $200 million in business activity and more than $30 million in tax dollars.
Hoffman’s projections line up with the Arizona Department of Gaming, which expects $34.2 million in annual General Fund revenue from legalized sports betting by the 2024 fiscal year.
“We’re in a world of guesses, at this point,” Hoffman said. “… The question is, will (sports betting) generate any residual or multiplier effects economically? I would make the case that if the alternative is spending that money on an offshore account, then it’s going to be a net positive to keep that money (in Arizona).
“So, you’ve got to keep in mind that all this money might have been leaking out to other states or countries, and now we’re collecting taxes on it and it’s staying in Arizona. So, all that is a good thing, economically speaking.”
Arizona Rep. T.J. Shope touched on a similar topic in a discussion with BetArizona.com, hitting on the positives that will come from gambling taxes, including the infusion of money into Arizona’s coffers.
“The funds generated off-reservation via this legislation will go straight to the state’s General Fund and tribes negotiated with the governor’s office to keep their contributions to the state essentially the same in their gaming compacts with a percentage of self-reported income being turned over to the state on a yearly basis," Shope said.
“Tribes in the state have seen the benefits of tribal gaming for the last 30-plus years and now the state, as a whole, will see benefits of increased revenue, without raising taxes."
'A War for Market Share'
Daniel McIntosh, a senior lecturer at ASU’s W.P. Carey School of Business, sees a similar adoption of sports betting in Arizona as what was seen in New Jersey after the Garden State launched in 2018.
New Jersey pulled in more than $1 billion in handle within the first six months of operation, by comparison.
For McIntosh, the adoption of sportsbooks in Arizona is a milestone worth commemorating, with a keen eye focused on how various sites managed to capture share in a new market.
“I think we've seen this before. And the closest example I could think of was the last presidential election,” McIntosh said. “During that presidential election, every newspaper, every advertisement, every banner ad on a website, was trying to get your vote. It was a war for market share.
“And the same exact thing is going to happen here in Phoenix during every football game, during every major opportunity for these books to capitalize on this market, you're going to see advertisements. It’s going to be a war for market share.”
Look for Promos from Sportsbooks
Once the dust settles, McIntosh sees customers in Arizona getting great deals from a variety of sportsbook operators that are trying to build a solid footing in the state.
“From a consumer behavior point of view, you’re going to see a flood of advertisements as this becomes available,” he said. “And then from an economics point of view, you’re going to get a lot of very favorable offers, as (operators) try to get you onto their platform.
“So, you can expect to see discounts and co-branding with different teams as they try to get you used to this new way of consuming sports.”
Such offerings could drive even more revenue for the state, in McIntosh’s opinion, as iGaming takes hold in Arizona, which is a win-win for all involved.
“I think it's a really exciting time in the world of sports, McIntosh said. “So, we're experiencing a ton of shocks to the system in the world of sports right now. Some that are going to have extremely profound impacts on how sports are played, how the participants are compensated and how these revenue models shake out. So, it's a really interesting time in the world of sports.”