Arizona is making less from sports betting than expected

PHOENIX - The numbers are staggering – billions bet on sports in Arizona.

"If you look at the numbers in Arizona since gambling has been legalized, the average adult in Arizona has placed $2,000 in sports bets," said Victor Matheson, an economic professor at College of the Holy Cross. "Some people would say that’s an awful lot of money to risk there."

Matheson studies sports and gambling at College of the Holy Cross.

"The big trend is obviously more and more states are adopting legalized gambling," he said. "At this point, two-thirds of states have legalized gambling."

Before online sports betting became legal in Arizona, former state lawmaker Jeff Weninger of Chandler sponsored the House bill and speculated that at least $100 million in new revenue every year would come in for the general fund, which supports more than 60 state agencies, with the Department of Education getting a big chunk.

But we are nowhere close to $100 million a year.

Sports betting revenue in AZ is less than expected

It's been two years since online sports betting began in the state and Arizonans love to gamble. Before the legislature allowed it, some claimed that the state would have hundreds of millions in revenue every year, but that has not come to fruition. FOX 10's Ellen McNamara reports.

In all of 2022, nearly $6 billion was wagered. Arizona collected only about $28.5 million in fees for the general fund. Even this year – when the Super Bowl and WM Open were here, the Suns made the playoffs and fans were betting on March Madness – about $3.5 billion has been wagered.

"You can’t just look at the numbers it brings in tax revenues. You have to look at the totality of everything, that includes economic development, bringing in new conferences., and frankly, if you think about it, probably in this broadcast you’ll see an advertisement for one of these platforms," Weninger told FOX 10 in October 2021.

No doubt economic development is happening, especially when we host big events, but the reality is the amount of money collected by the state government is low. Our tax rate means that for every $100 bet in Arizona, that state only takes home $5.

"So the sportsbooks are definitely getting rich," said Matheson. "The sportsbooks have made about a billion dollars in net winnings."

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Right now, there are 17 sportsbooks. Max Hartgraves with the Arizona Department of Gaming says soon there will be 18.

"The vast majority of wagers are placed online. Well over 99 percent," he said. "For example, I believe in the most recent release we had for July of 2023, we had over $323 million wagered in the state and $320 million dollars of that was wagered from an online format."

Cellphones have made betting on sports easier than ever, which is why addiction can become a problem.

Elise Mikkelsen with the Division of Problem Gaming says they don't have enough data to show that online sports betting has contributed to an increase in hotline calls.

"Right now, everyone is having a good time, enjoying it, and we don't anticipate any big surge in treatment or requests for help until later on," she said.

But Mikkelsen says Arizonans need to know that there is help for any kind of gambling addiction.

Matheson says sports betting will only continue to grow.

"I think we’ll see a world where just about everywhere in the United States has legalized sports gambling here the next five years," he said. "It certainly has expanded far faster than things like casinos or lotteries ever did."

The state of Kentucky just legalized mobile sports betting, making it the 25th state to do so. The big three states – Texas, California and Florida – have yet to legalize it. Matheson says it's only a matter of time.