Arizona gamblers lose $51 million on sports bets in November as total betting surpasses $1 billion

Arizona gamblers lost about $51 million betting on sports in November, a banner month for the state's new legal sportsbooks, according to state data released Tuesday.

The nine mobile sports betting sites plus two in-person sportsbooks operating in downtown Phoenix took about $467 million in total wagers for November, the third month legal gambling was allowed following a new law last year.

Already, gamblers have wagered more than $1.2 billion on sports after three months of legal betting.

“Arizona has exceeded expectations and is already a top 10 market nationally,” Department of Gaming Director Ted Vogt said. “Revenue from these new games is strong and will only get stronger as the market develops.”

November's total wagers were down slightly from October's $486 million, but that month had five weekends and November only had four.

Sportsbooks pay 8% of adjusted revenue from in-person gambling and 10% of mobile revenue in fees to the state. They also pay 0.25% of total wagers in a federal excise tax.

But they also are allowed to deduct up to 20% of their revenue for promotions such as "free bets" in the first two years they are open. That amount totaled $18 million in November, and it's the reason Arizonans are seeing so many sportsbook ads on television and on billboards.

The state collected about $3.2 million in fees for the month. That number would have been $1.8 million higher if not for the provision allowing sportsbooks to deduct free bets and promotions from their liability.

Still, November's fees to the state were substantially higher than September and October, which combined brought in only about $1 million to the state because of the sportsbooks deducting promotions.

In September, the mobile sportsbooks won $32 million from gamblers after paying out winners but were able to avoid paying fees to the state entirely because they offered so many free and promotional bets to gamblers that it completely offset their liability to the state.

The $31,000 in fees paid that month came entirely from two brick-and-mortar sportsbooks that opened that month, FanDuel's book at the arena where the Phoenix Suns play and Caesars Entertainment's facility at the home of the Arizona Diamondbacks.

The deductions they are allowed decline each year after the first, and in their sixth year they can no longer deduct free bets from their liability to the state.

The "hold" or "win" percent for mobile sportsbooks in Arizona was 11% for the month.

That means for every $100 bet, sportsbooks won $11 and paid the rest back to gamblers.

That's particularly high, about double the annual hold percent for Nevada sportsbooks, but experts at PlayUSA.com, which tracks sports betting across the country, report that November was especially high in all legalized markets, with a national average of 9.8% that month, the highest since October 2019.

And unlike September and October, Arizona wasn't highest in the nation in November.

How much was waged on sportsbooks

The top five mobile sportsbooks in Arizona for the month in terms of total wagers, in order, were:

• DraftKings Inc.: $149 million in total wagers.

• FanDuel Group: $113 million.

• BetMGM: $93 million.

• Caesars Entertainment: $63 million.

• Barstool Sports: $18 million.

December added two new mobile sportsbooks to Arizona's licensed operators and January added yet another, bringing the total to 12.

States across the country have legalized sports betting after a favorable 2018 Supreme Court ruling.

Thirty states plus Washington, D.C., have live legal sports betting and it's coming to three others, according to the American Gaming Association.

With November's wagers, Arizona has become the fastest state to top $1 billion in total bets placed of all legal markets, though it is expected to be eclipsed by New York, which launched sports betting this month.

“Arizona is in a remarkable position for such a young market,” said Eric Ramsey, an analyst for the PlayUSA.com Network. “Local bettors have responded enthusiastically, obviously, giving the state’s sportsbooks an impressive start. And operators have clearly placed a lot of emphasis on the state, considering the promotional spend so far. Tax revenue will likely lag some while operators are so aggressive, but that should continue to come around as the market settles.”

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.

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This article originally appeared on Arizona Republic: Arizona sports betting statistics for November show gambling losses