THIS WEEK IN SPORTS BETTING - ARIZONA FANDUEL PARTNERSHIP

Best US Sportsbooks · Weekly Update

August 25th, 2021 Weekly Report

This week in legal sports betting news, FanDuel has secured license approval by the Arizona Department of Gaming to start offering bets by September in time for the NFL season.

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CONTENTS

FANDUEL TO GO LIVE IN ARIZONA UNDER PHOENIX SUNS LICENSE

The Arizona Department of Gaming has approved FanDuel for daily fantasy sports contests (DFS) and event wagering. The well-known sports betting and DFS provider has been poised to offer their services in partnership with the Phoenix Suns since April 2021, announcing their cooperation on the same day that Governor Doug Ducey (R) signed a gambling expansion package into law.

ARIZONA GAMBLING EXPANSION COVERS KENO, DFS, SPORTS BETTING

As legalized in April 2021, the gambling expansion law signed by Gov. Ducey includes a new provision for keno and fantasy sports at eligible racetracks and fraternal organizations.

Additionally, operators will be able to apply for licenses for in-person and online sports betting in partnership with local sports franchises, sporting event venues, and tribal organizations.

FANDUEL, PHOENIX SUNS TO OFFER DFS, RETAIL AND ONLINE SPORTS BETTING

FanDuel and the Suns will partner to offer in-person (also known as “retail” or “brick-and-mortar”) and online sports betting in the Grand Canyon State.

Plans include building a luxury retail sportsbook at the Footprint Center (formerly Phoenix Suns Arena), the Suns’ home court- a renovation that’s reported to be 80% complete as of this writing. Says Mike Raffensperger, FanDuel Group CMO:

”We’re excited to open a luxury sportsbook within (Phoenix Suns Arena), as the beginning of a long-term and innovative collaboration that will have a lasting impact on the state.”

Many interested parties with existing partnerships in the state are working towards retail sportsbooks, including kiosks and full-scale venues at sporting events and tribally-owned gambling providers.

However, the primary focus of most sports betting providers is on mobile. Mobile sportsbooks will go live as soon as the NFL season, as most providers already have the technology in place to offer online betting without starting from the ground up.

ARIZONA LEGALIZES TO CAPTURE LOST REVENUES, FANDUEL TO CAPITALIZE ON NEW MARKET

FanDuel already has a sizable share in most states that have a legal, competitive betting market. With Arizona anticipating $200 million in GGR, or gross gaming revenue, from taxes on event wagering, there’s a definite scramble for operators to secure a license from the ADG.

In total, 20 licenses are up for grabs: 10 are available in partnership with local teams and sporting venues, and 10 in partnership with local tribal organizations.

Numerous operators began announcing license partners as soon as AZ’s Ducey signed HB 2772 into law, including FanDuel’s partnership with the Phoenix Suns. The state is set to be one of the largest sports betting markets in the country in terms of overall “handle”- the amount bet by users in a given fiscal year- so the new market has a definite appeal for betting and DFS providers.

PRE-REGISTRATION TO BEGIN AUGUST 28TH

Of course, the primary focus of an operator looking to enter a ripe US market is online play. Mobile betting accounts for 81-90% of wagers on live sporting events as reported by the Associated Press in spring 2021.

As a consequence of this, operators want to register online users as soon as possible: the ADG has allowed platforms like FanDuel to start pre-registering users by this Saturday, August 28th, 2021. Pre-registration is often paired with so-called “pre-launch” or “sign up” deals, granting users a bit of non-withdrawable betting credit to place free bets or refunding their stake on certain lost wagers.

FanDuel plans to offer pre-launch deals as well as a series of welcome promotions and incentives for users to sign on to the service. These are provided within the bounds of Responsible Gaming guidelines and intended to incentivize the creation of new user accounts.

RESPONSIBLE GAMBLING, TAX REVENUES OF PRIMARY CONCERN

As with any legal sports betting package, Arizona wants to divert gambling revenues leaving the state back into general funds. Mobile betting will be taxed at a 10% rate, competitive given the high range of proposed and actual sports betting tax rates in the US. For example, Pennsylvania's sports betting operators have their handle taxed at 36%, while New York’s former governor proposed a 50% rate there before his resignation.

Many states are seeing the value of reining in illegal gambling with offshore providers or neighborhood bookies. This 10% tax will benefit the Arizona General Fund, which funnels revenue into education (48%, according to the AZ 2020 Appropriations Report), health services, corrections, economic security, and more.

Noteworthy gambling providers in the US, including FanDuel, spend considerable effort to not only convert customers from unregulated websites to their legal platform, but to provide services for problem gamblers as well. In a newsroom release from FanDuel:

”...the Suns and FanDuel will work together on a series of responsible gambling education activities to ensure Arizona fans enhance their sports experience responsibly. This includes media designed to encourage customers to gamble safely and within limits.”

BETTING WITH FANDUEL ARIZONA TO GO LIVE SEPTEMBER 9TH

To line up with the start of the NFL season, which historically takes in the lion’s share of betting handle in the US, Arizona sports betting licenses become active on September 9th. FanDuel, having secured the first of a possible 20 wagering licenses in the US, is poised to accept bets as soon as the season’s opening matchup between the Cowboys and the Buccaneers.

Written by Chris Altman, our US Betting Industry expert.

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