Taking the Ballpark Experience to the next level
Updated: Aug 30, 2021
How in-venue sport gambling facilities stand to alter the sport betting landscape
A May 31st game between the Philadelphia 76ers and the Washington Wizards at Capital One Arena marked the first time a legal United States sportsbook operated within a venue. As more venues open in-venue betting capabilities, the sport betting industry may see changes happen.
Since the 2018 Supreme Court ruling that deemed the Professional and Amatuer Sport Protection Act of 1992 was unconstitutional, more than 20 states have fully legalized sport gambling, with many more to follow suit in the coming months and years. The legal sport betting industry is estimated to be worth upwards of $100 billion, a number that will increase once more states legalize sport gambling and illegal wagering is effectively eliminated. Sports media providers, teams, and even leagues have already begun their foray into the sports betting space by creating exclusive partnerships with sportsbooks across the country. We have seen Major League Baseball enter deals with MGM Resorts, DraftKings, and FanDuel as official gaming partners, giving them the ability to stream games and use MLB data, including logos and trademarks. Some have gone so far as to create their own in-house sports books: FOX network has created FoxBet and ESPN is looking to create its own sports book after finding success in its relationship with Caesars.
Currently, mobile betting dominates sports gambling activity, with a few teams aside from the Wizards having upcoming plans for invenue sportsbooks. Namely the Pittsburgh Penguins with BetRivers, Chicago Cubs with DraftKings Sportsbook, and Washington Nationals with BetMGM will likely open facilities within or nearby to their home venues in the coming seasons. This begs the question: How will in-venue sport gambling facilities stand to alter the sport betting landscape
The Answer: Invenue sport gambling spaces will serve as compliment and gateway for the mobile gaming space
What sportsbooks will look like within sporting venues
Sportsbook operations within many venues today are represented by nothing more than a few tv screens showing game action and betting odds, alongside kiosks where wagers can be placed. As state legislation progresses these kiosks will turn into full service sport betting lounges. These betting lounges will be large, luxurious spaces, with different dining and entertainment options within them. The Washington Wizards were the first to unveil their betting lounge, a 18,000 square foot 2-story unit with various bar and lounge areas spread throughout. The restaurant within the space is curated by a Michelin Star Chef. The space has over 100 televisions showing various sporting events and betting lines. The decor pays homage to the Wizards and the rest of the Washington DC teams, by incorporating memorabilia from each. Its betting functionality is in the form of 17 betting windows and 12 self-service kiosks. Opulent lounges like these are expected to spring up in venues across the country, as soon as next year.
Why the sportsbook lounges are important as a gateway
The exuberance of these lounges and their placement within the stadium atmosphere seek to draw in an audience of both sport fans and gamblers alike. These lounges will largely only be open to those who are betting, and the space will have amenities not afforded to non-sport gambling fans thus, these entertainment and dining options within the lounges will increase the exclusivity of the space. This in turn forces the non-gambling sport fan to place a wager in order to access the space. I believe the industry hopes that the lounges and in person gambling gives fans an incentive to gamble more in the future. In addition to acting as a gateway for non-gamblers into the realm of gambling, the space hopes to turn gamblers into sport fans. By giving gamblers a taste of the stadium atmosphere, teams hope to give gamblers an experience that a mobile app cannot offer them. Many of these sports betting lounges will be open on non-game days and allow visitors to watch games, eat, and be entertained even when the rest of the stadium is closed. This can serve as an important revenue stream for the teams if they are the owners of the venue, as the profitability goes beyond the standard venue profitability of only home games. If teams are simply tenants of the venue, their monetary gain from the inclusion of these lounges is little, as the lounges are rented from the venue owner and could potentially act as competition for expenditure.
Why the sportsbook lounges are a compliment to mobile betting
While mobile sport betting has already been legalized in many states, the status of in-person wagering lags far behind. As a result, rather than competing for revenue streams with mobile betting, these sportsbook lounges will serve as a space where people can wager on their mobile devices. The comfortable setting and numerous tv’s allow for fans to watch an assortment of events and wager on them while at the venue.
Prior to the opening of the betting lounge, the temporary betting space in Capital One Arena handled 113,000 bets and $12.2 million in handle in the month of September, during the COVID-19 Pandemic. This number is expected to increase significantly now that the lounge is open. The Washington Wizards expect this lounge to attract an additional 1 million fans to the stadium, as it is open 7 days a week, with an entrance outside the venue.
Much of the success depends on consumer behavior
It is anticipated that these lounges will have a strong appeal to those that are treating the sporting event as a form of entertainment rather than caring about the actual outcome of the game. These individuals will be more inclined to sacrifice watching the live sporting event for the luxurious confines of the betting lounge and the exclusive amenities it offers. I believe the lounges will struggle to attract the diehard sport fan for a couple of main reasons. Primarily because they came to watch the sport for its on-field result-- these individuals are there to watch their team win the game being played. Secondly, these individuals will be hard pressed to bet logically against their loyalties, and these fans usually believe in the sanctity of the game.
Add something about what MSCG thinks and its greater impact on the sports betting landscape
Impact on the Sport Betting Landscape as a whole
MSCG believes that invenue sport betting will serve primarily as a gateway for non-sport gamblers to get their toes wet in the sport gambling space. They will likely have success enticing those that attend the venue for entertainment purposes rather than sport content, as these individuals are more willing to spend time on the concourse and away from the field. The luxury aspect of sport betting lounges offer fans a getaway from the uncomfortable seats and food-ridden walkways that are commonplace at sporting events. We believe the monetary impact these lounges have on the sport betting landscape as a whole will likely be minimal during home games as betting will have to contend with other venue attractions (ie. concessions, souvenirs, etc.) The real strength of these lounges is when the home team is out of the building, these lounges will have the capability to take larger bets and be a meeting place for sport bettors who want an experience while betting.
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