- Arizona Governor Katie Hobbs proposed a sports betting tax rate increase from 10% to 45% in the state’s proposed budget for fiscal year 2027.
- Hobbs believes the increase will generate an additional $150 million annually.
- The tax hike impacts AZ sportsbook operators handling over $75 million monthly and would not affect smaller sportsbooks in the state.
PHOENIX – Arizona wants a greater share of the state’s online sports betting revenue. In the state’s most recent budget proposal, Governor Katie Hobbs proposed a legal sports betting tax rate increase from 10% to 45%.
The proposed increase would generate an extra $150 million annually from the state’s “large operators” that handle more than $75 million monthly. According to Arizona’s latest revenue report from Nov. 2025, just four sportsbooks will be impacted by the proposed tax increase. Those Arizona sportsbooks are BetMGM, DraftKings, Fanatics, and FanDuel, who represent roughly 75% of the entire market share.
Will The Arizona Sports Betting Tax Rate Proposal Pass?
The jump from 10% to 45% is quite significant when looking at the national landscape of sports betting tax rates. There are only four states with legal sports betting that have a lower tax rate than Arizona’s current 10% rate, while 19 states and the District of Columbia impose a mobile sports betting tax rate above 10%.
However, at 45%, Arizona would go from the fifth-lowest to seventh-highest rate out of 30 states with regulated online sports betting. Delaware and Illinois boast a 50% rate, while New York, New Hampshire, Oregon, and Rhode Island have the nation’s highest sports betting tax rate at 51%.
Proposing to more than quadruple the Arizona sports betting tax rate is already controversial, but Democratic Governor Hobbs must also convince traditionally tax adverse Republicans that have majority in both Arizona legislative chambers.
