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Arizona Gov. Katie Hobbs has proposed a sharp increase to the state’s sports betting tax rate in her latest $17.7 billion budget, with a new 45% rate tied to a $75 million monthly threshold. Arizona currently taxes sports betting at 10%.
The proposal drew an immediate clarification from the Arizona Department of Gaming, which said the threshold is based on monthly handle, not revenue. That distinction matters because the budget language reportedly described it as revenue, while the regulator said it refers to gross event wagering receipts as listed in the department’s monthly reports.
Budget plan would create a much higher top tax tier
According to the proposal, operators reaching $75 million or more per month would face the 45% rate. The budget also says the increase would have no impact on Tribal operators.
In language quoted by Sports Betting Dime, the proposal says Arizona’s current 10% fee is among the lowest in the country and argues that a tiered structure would better align the state with others that charge more. It specifically notes that New York, New Hampshire, and Oregon all assess 51%.
Arizona projects the change would generate more than $145.9 million in sports betting tax revenue in fiscal year 2027 and $202.4 million by fiscal year 2029.
Regulator says the key threshold is handle, not revenue
The Arizona Department of Gaming told the outlet that the $75 million figure refers to gross event wagering receipts, or handle, as reported in its event wagering revenue report.
That clarification is important because the source article says no Arizona operator, including FanDuel and DraftKings, has come close to $75 million in monthly revenue. Whether lawmakers revise the budget language to clearly reflect handle instead of revenue is now one of the main questions surrounding the proposal.
Part of a wider tax trend across sports betting states
Arizona’s plan arrives as several states have recently moved to collect more from sportsbook operators. The source article points to tax increases in New Jersey, Maryland, Louisiana, and Illinois.
For readers in New York, the comparison is notable because the Arizona proposal explicitly cites New York’s 51% rate as a benchmark. Still, Arizona’s plan is only a proposal at this stage, and the legislature has not yet approved it.
What to watch next: whether Arizona lawmakers keep the 45% top rate, whether the threshold is rewritten to clearly mean handle, and when any final change would take effect if the budget passes.
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Source: As reported by Robert Linnehan.
