Department of Gaming to Open Arizona Sports Betting Licenses

Arizona sports betting customers haven’t lacked for options since sports betting went live in 2021. But the Arizona Department of Gaming thinks the state could sustain several more sportsbook operators.

The Department of Gaming announced that it’s accepting applications for up to 10 new licenses for Arizona sports betting operators. These will allow off-track betting facilities, retail locations and raceways to offer in-person sports betting, which can be done through a sportsbook partner. The state will accept applications beginning August 13, and close the process on August 27.

It’s the second time this summer that the Department of Gaming has chosen to further open Arizona sports betting. In June, the Department announced that it was opening up existing online sportsbook licenses, of which it has a maximum of 20.

What Is the State of Arizona Sports Betting?

For the most part, Arizona has been friendly toward sports betting. Both the state’s Native American tribes and the state’s existing professional sports teams are able to offer legal online sports betting, with most partnering with one of the major names in the industry.

However, the industry has met a couple recent changes in the Grand Canyon State. First, the NHL’s Arizona Coyotes relocated to Salt Lake City, Utah, becoming the Utah Mammoth. As they were no longer an Arizona team, the license didn’t travel with them, and partner Sahara Bets shut down. Second, other sportsbooks have gone out of business, freeing up those licenses.

Why Would Anyone Opt For A Limited License?

Three big reasons exist for these new licenses: the access, the cost and the tax rate. First, it’s substantially less complex to get one of the limited Arizona sports betting licenses. In order to qualify for the online betting license, a sports team or facility had to be the highest level of its sport in Arizona.

That was one reason Sahara Bets didn’t continue: with the Coyotes gone, it wasn’t clear if the minor league American Hockey League’s Tucson Roadrunners qualified or not. The United Soccer League’s Phoenix Rising also faced a similar question, as USL is a step below Major League Soccer.

Costs were also prohibitive for Rising and others. The application fee for an online sports betting license is $100,000, and the license itself costs $750,000 plus a $150,000 annual fee. For someone like the NFL’s Arizona Cardinals, that’s a drop in the bucket. That’s not the case for smaller professional teams. A limited event in-person license can be obtained for a much more manageable total cost of $16,000 for the first year and $5,000 each year after.

Finally, the tax rate is more friendly to limited-event operators. The online Arizona sports betting tax rate sits at 10%, while the limited event rate is just 8%. That’s not a big difference, but for smaller operators, that 2% can be crucial to staying in business.

What’s Next In the Process?

Applications can be accepted beginning August 13. The amount of applications could give a telling clue to the future of Arizona sports betting.

The lower rate could be critical next year if Gov. Katie Hobbs makes another effort to raise online sports betting tax rates. In her 2026 budget, Hobbs suggested raising the tax rate from 10% to 45%. Ultimately, that didn't make it into her final proposal.

Hobbs and Arizona legislators are up for re-election in November, and the political climate could change drastically. Currently, Republicans control both chambers of the Arizona legislature, but Democrats need to flip four seats in the Arizona House and three in the Arizona Senate to win control. If they do and Hobbs wins her race, she might be emboldened to pursue a rate increase, as she’d be working with her own party.