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One of the biggest sports betting markets in the country is about to welcome a new sportsbook to the family.
The Arizona Department of Gaming announced it awarded an event wagering operator (sports betting) license to Fanatics, the upstart sportsbook that will enter the Arizona market through a partnership with the Tonto Apache Tribe.
The license costs a total of $850,000 upfront and has an annual renewal fee of $150,000.
How Fanatics fits into the Arizona sports betting universe
Fanatics is the leader in sports memorabilia for professional American sports leagues. However, it’s a relatively small player in the sports betting world.
The sportsbook will be live in 17 states once it launches in Arizona. It’s preparing for launches in Kansas, Louisiana, New Jersey, and Wyoming, too. And last month Fanatics debuted in New York.
There are currently 17 online sportsbooks and more than 25 retail locations in Arizona where you can place a bet in person.
Like every other market, online sports wagers dominate the market. In January 2024, AZ online books generated nearly $700 million in handle (total amount bet) while non-tribal retail sportsbooks brought in around $2.1 million.
The market leaders in Arizona fall into three tiers:
- Tier 1 (more than $100 million in handle): FanDuel and DraftKings
- Tier 2 ($40 million to $99 million in handle): BetMGM, Caesars, ESPN Bet
- Tier 3 (Less than $40 million in handle): Everyone else
Fanatics will almost certainly be a Tier 3 sportsbook, competing with smaller outfits like Hard Rock Bet and Desert Diamond, which combined for around $13 million in revenue in January.
Can Fanatics handle the Arizona sports betting market?
Yes, Fanatics is equipped to handle a leading sports betting market. The company already operates in three of the top 5 sports betting states by handle, per January 2024 numbers: New York, Pennsylvania, and Ohio.
It’s also slated to go live in New Jersey, which usually has the second-highest monthly handle in the country. Recently, Fanatics announced a North Carolina launch, which will likely be a top 5 sports betting state once its new online market matures.
That being said, the company’s experience can’t change certain revenue-suppressing factors in Arizona. It will never compete with FanDuel and DraftKings, and it likely won’t be able to match the numbers of any Tier 2 operators.
However, it could carve out a niche as the top Tier 3 company in the Grand Canyon State.
