The success of sports betting in Arizona indicates that iGaming would increase tax revenue.

Arizona iGaming Would Boost Tax Revenue Given the Success of Sports Betting

The successful and speedy launch of Arizona sports betting sites, both in-person and online, in 2021 indicates a bright future for the growth of digital gambling, especially in the realm of iCasino. iCasino encompasses a variety of casino games such as slots and table games that are accessible on computers and mobile devices.

In April 2021, Arizona Governor Doug Ducey approved the state’s sports gaming law, and by September, both in-person and online sportsbooks were already taking bets. This accelerated pace is considered unusually quick within the realm of sports betting legislation.

Several professional sports teams in Arizona, including the Arizona Cardinals and the Arizona Diamondbacks, along with Native American casinos, have partnered with national online sportsbook operators to provide sports betting options.

What implications does this have for the transition to iCasino, considering the substantial increase in financial stakes involved?

Light and Wonder, a gaming company, in collaboration with VIXIO GamblingCompliance, a gaming research organization, recently published a report predicting potential revenue for states that legalize iCasino, also known as iGaming. According to the report, if Arizona were to legalize iCasino, the state could potentially generate annual gross gaming revenue of $805.6 million and tax revenues of $161.1 million, based on a 20% tax rate. These figures are also anticipated to include contributions to Tribal governments.

State iGaming GGR Potential iGaming Tax Revenue Potential
Arizona $805.6M $161.1M

Source: VIXIO GamblingCompliance


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Arizona Sports Betting Off to a Strong Start

Arizona betting apps brought in around $161 million in revenue throughout 2021. The state ranked fifth in the nation for sports betting market activity during the fourth quarter, the busiest time for sports gambling.

Alternatively, when considering the Light & Wonder/VIXIO projection for iCasino in Arizona, the expected average quarterly revenue is around $200 million, as outlined in the report’s assumptions.

Along with signing the sports betting law, Ducey also gave the green light to a new compact for Tribal casinos allowing for the introduction of Las Vegas-style gambling, such as roulette and craps. Previously, the state’s Tribal casinos were limited to offering electronic gaming devices like slots and a small selection of card games like blackjack.

Navigating the world of Arizona online casinos can be more complex than in other states, as it may involve Tribal casinos teaming up with national gaming companies, creating potential challenges in their partnership.

More on Tribal Gaming

Earlier this year, Saverio “Sal” Scheri, the Chief Operating Officer of Agua Caliente’s three California casinos, discussed the potential impact on Tribal casinos at a gaming conference during an iCasino panel.

Tribal casinos may receive a substantial upfront payment and have their licensing fees paid by a national company, along with enjoying marketing and brand association benefits. However, the Tribe may only receive a small percentage (2-3%) of revenues for a decade or more. In addition, the established Tribal casino can provide access to a well-developed customer database accumulated over many years in operation.

The discrepancy in viewpoint is a matter of concern as well. While businesses generally focus on a five-year plan, Tribes take a much broader perspective, considering the well-being of future generations, including the “grandchildren of your grandchildren,” as highlighted by Scheri.

He cautioned about the possibility of a partnership turning bad, citing the frequent occurrences of such situations in history.

Scheri went on to explain that the past negative experiences in the Tribal gaming industry have caused many to be hesitant in following similar paths, as they have been disappointed multiple times.

Tribal interests have a lot riding on the success of their physical casinos, as the jobs they create are vital to their communities.

Is Michigan a model for Arizona to follow?

It is important to note that Michigan is one of six states that have legalized full iCasino, with both commercial and Tribal casinos operating in the state. However, the short duration of this legalization may hinder our ability to draw concrete conclusions.

Balancing the financial objectives of publicly traded corporations dominating the iCasino market with the responsibilities of Tribal Nations in Arizona to fund infrastructure and community services can present difficulties. Tribal entities may opt to operate autonomously in the iCasino sector or hold off on forming partnerships until they are certain of the benefits.

The state of Arizona successfully launched in time to allow betting on the NFL. Will the timing be as smooth for the eventual launch of iCasino?

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Author

Bennett Yehoshua

Bennett Yehoshua, a writer for BetArizona, has a strong journalism background with 25 years of experience as a reporter and editor for the Philadelphia Inquirer and Baltimore Sun. He was part of a Pulitzer Prize finalist team in Breaking News. Yehoshua shifted to covering casinos and gaming after the opening of Atlantic City’s first gambling halls, writing a syndicated column on travel to casino destinations for 10 years. He also covered the World Series of Poker for a decade and had his gaming articles published in major U.S. newspapers like the Los Angeles Times, Chicago Tribune, and Miami Herald.

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