Hobbs Needs to Make Arizona Sports activities Betting Tax Amongst Highest within the US

• Governor is proposing a forty five% tax charge on choose operators
• The state at the moment levies a ten% on web sports activities wagering
• As is the case in Illinois, the proposal targets the most important operators

Within the seek for extra income, Gov. Katie Hobbs (D-AZ) desires to spice up Arizona’s sports activities betting tax to 45%, or greater than quadruple the present charge of 10%.

Arizona Gov. Katie Hobbs (D). She desires to boost the state’s sports activities betting tax to 45% on choose operators. (Picture: Getty)

Her fiscal 2026 price range of $17.7 billion unveiled final month incorporates a provision, that if handed, would increase the income the state collects from on-line sports activities betting by $145 million. On-line sports activities betting debuted in Arizona in 2021 and since then, the state has turn out to be one of many fastest-growing markets for that type of wagering in US.

Arizona was among the many states the place operators most quickly eclipsed $1 billion in mixed income and one of many quickest to succeed in $15 billion in mixed deal with. The price range should go into impact earlier than the 2026 fiscal 12 months commences on July 1.

Illinois Inklings in Hobbs Plan

Beneath pointers set forth by the Arizona Division of Gaming (ADG), as much as 20 sportsbook operators can do enterprise within the state, however in a plan that appears considerably impressed by Illinois, the Hobbs plan requires the 45% tax charge to be utilized solely to the web sportsbook operators doing a minimum of $75 million in month-to-month enterprise.

Translation: If the Hobbs tax proposal turns into legislation, it’d solely apply to Caesars Sporrsbook, DraftKings, Fanatics, and FanDuel, primarily based on present information.

That’s just like the method seen with the 2 sports activities betting tax will increase in Illinois. In 2024, politicians there carried out a progressive tax scheme the place the most important operators by market share, particularly DraftKings and FanDuel, paid a better tax charge than their smaller opponents.

Final 12 months, the Midwest state carried out a new levy of 25 cents per wager on an operator’s first 20 million booked bets, with that charge doubling to 50 cents per wager for every wager positioned after that preliminary 20 million, which additionally primarily impacts the most important operators.

Arizona Might Climb Ranks of Sports activities Betting Tax Charges

Confirming that many states view sports activities betting as an essential income supply, Louisiana, Maryland, New Jersey, and Washington, DC joined Illinois final 12 months in growing associated taxes. Nonetheless, it stays to be seen if Hobbs has the political capital to greater than quadruple the sports activities betting tax, which can be a troublesome job on condition that each homes of the state legislature are managed by Republicans. She’s additionally up for reelection this 12 months.

It’s clear that if the Hobbs plan turns into legislation, Arizona would go from having one of many nation’s lowest sports activities wagering taxes to one of many highest. Solely Delaware, Illinois, New Hampshire, New York, Oregon, and Rhode Island apply web sports activities wagering levies in extra of 45%, in accordance with The Tax Foundation.