Offering sports betting could generate higher ticket and traffic from the growing number of Americans who are placing wagers.
A record 50.4 million American adults, or about one in five, plan to place a bet on this year’s Super Bowl between the Philadelphia Eagles and the Kansas City Chiefs, according to the American Gaming Association. The association predicts they’ll wager a total of $16 billion on the game. This could provide quite a lift for restaurants that have embraced sports betting in one of the 36 states where such activity is now legal.
In 2018, the U.S. Supreme Court struck down a federal law that outlawed sports betting in states other than Nevada. The ruling opened the flood gates for state-by-state legalization and on Jan. 1, Ohio became the latest state to legalize sports betting. As that law went into effect, more than 700 restaurants and bars in the state were already licensed to host on-premises sports gaming, proving that many operators are embracing the activity in a bid to drive foot traffic.
It is clear that many Americans want to bet and many of those will also want to eat, drink and socialize outside of their homes. That is no doubt a big opportunity for places like Hide-A-Way Buffalo Grill in Canton, Ohio, which installed a self-service sports betting kiosk once its state became legal. According to the Canton Repository, there are about 1,000 licensed kiosks already installed throughout Ohio, while another 400 have been pre-approved for licensing. In Ohio, it costs $1,000 to apply for this license, which lasts three years. The added cost may add pressure in an already pressured environment, but it could also prove to be a quick return given the growing interest. The sports betting market is expected to increase by about 10.2% each year through 2029.
Customers who are invested in a game are likely to stick around longer and spend more, according to a report from CGA by NielsenIQ. As such, several chains have partnered with online sports betting companies, including Buffalo Wild Wings, which teamed up with BetMGM in 2019 and expanded on that relationship in 2021 to offer in-restaurant experiences when placing wagers. At the time, then-CMO Rita Patel said the brand was looking to further expand its footprint in the sports betting space as it continued to grow. (Buffalo Wild Wings did not respond to a request for comment for this story). Hooters has also embraced sports betting through its partnership with DraftKings, while other concepts, including Dave & Buster’s have started exploring such partnerships.
Demand, traffic, ticket, nominal licensing fees – on the surface it seems as though there is a lot of upside for restaurants to embrace legal sports better and that is why the Ohio Restaurant Association was in favor of that state’s law.
“The Ohio Restaurant Association worked hard to make sure there were many ways for Ohio’s restaurants and bars to participate in and benefit from legalized sports gaming here in the Buckeye State,” said Tod Bowen, managing director of external affairs and government relations at the ORA.
Bowen pointed to the potential that this legalization has created; for example partnering with one of Ohio’s casinos or one of the 20-plus online apps approved for online play in Ohio or the ability to obtain a license to offer sports gaming via kiosk, which he said was relatively unique.
“We wanted to make sure the path for Ohio bars and restaurants to benefit was robust,” he said. “We look forward to helping our members evaluate this new and growing opportunity to engage with their patrons.”
Evaluation is key here. Though sports betting could bring in more traffic and higher checks, there is also the chance it could create more chaos or even negative perceptions as gambling addiction has grown by 30% within the past several years. The risk/reward scenario is yet to be seen, which is why the Texas Restaurant Association has stayed neutral on the issue as it comes up every election cycle.
“We will stay neutral until we can really determine the impact on restaurants,” said Emily Williams Knight, CEO of the Texas Restaurant Association. “We don’t yet know what the bottom-line impact is to what is being proposed, so we’re keeping the powder dry for now.”
In the meantime, all eyes are on Glendale, Arizona, where sports betting has been live since September 2021 and where there is no shortage of establishments that offer the opportunity.
Contact Alicia Kelso at [email protected]
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