Arizona’s sports betting market experienced a slowdown in May 2023, although sportsbooks showed strong hold rates against the state’s bettors.
The overall handle for the month dropped to $451.7 million, which is down 15.8% compared to April.
However, that trend reflects the U.S sports betting cycle, with less activity during the off-seasons of the major sports leagues.
The overall handle may have been down, but the state’s sportsbooks can at least say they had good holds. They posted their second-best monthly hold since legalizing in 2021, off just 11%. That’s well above the nationally expected average of 7%.
One of those operators contributing to an impressive hold was local Arizona online sportsbook Desert Diamond, run by the Tohono O’odham Nation. It also saw significant growth in its market share.
Despite the overall decline in handle for the state, Desert Diamond Sportsbook managed to increase its handle from $500,000 in May 2022 to $10 million in May 2023.
This growth propelled the sportsbook to the sixth position in terms of market share out of 16 sportsbooks, ahead of national brands like Rush Street Interactive, Barstool Sports, and Bally Bet.
National Leaders Dominate
The gross gaming revenue for May amounted to $48 million, resulting in a hold percentage of 10.7%. After promotional credit deductions, the adjusted gross revenue for the month came in at $33.3 million, generating $3.3 million in tax dollars for the state.
The national market leading operators FanDuel and DraftKings accounted for 65.12% of the total handle, with FanDuel at $162.3 million, followed by DraftKings with $130.4 million.
BetMGM was the third-most popular sportsbook in Arizona for May, reporting $66.8 million in handle. Between the three of them, they accounted for 80% of the market share.
Desert Diamond Shines
As usual, those three top operators were all mobile. However, May showed even higher than usual mobile sports betting dominance in Arizona, with just 0.875% of the total handle bet at retail books.
BetMGM’s retail books at Gila River Resorts came dead last out the three national chain retail options at $610k in handle for the month. However, the two companies did recently launch Arizona’s new largest retail sports betting venue in July, so that figure could improve in the next update.
The promotional spending in May was relatively quiet, totaling $14.7 million, with the majority of it coming from the big three operators – FanDuel, DraftKings, and BetMGM.
Interestingly, the high-performing local Desert Diamond Sportsbook reported no promotional credit deductions for May.
Desert Diamond’s growth extends beyond just sports betting, as it just broke ground on construction in what will be its fourth casino property within the state, to be located just outside Glendale.
Despite the slowdown in May, the sports betting market in Arizona remained robust, with a very strong hold rate and the success story of a local operator to highlight.
However, it remains to be seen how that will have held up in June, when upset championship wins from the NHL’s Las Vegas Golden Knights and the NBA’s Denver Nuggets cost sportsbooks a lot of money in payouts.
