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At the southern edge of downtown Phoenix, on a street corner that bisects the Arizona Diamondbacks’ ballpark and the Phoenix Suns’ arena, stands a wayfaring sign unlike any other in a country rapidly embracing sports betting, directing pedestrians left to Caesars’ sportsbook, or right to FanDuel’s.
From there, it’s an easy one-block walk to either.
Conveniently located in a two-story brick building nestled next to Chase Field’s main entry, Caesars Sportsbook boasts a Guy Fieri-branded restaurant with a party-friendly patio. For those who might somehow miss it from the distance, there’s a three-story billboard on the side of the ballpark.
The now familiar face of Caesar, who for half a year dominated the sports airwaves, looks down approvingly.
FanDuel’s spot is equally prominent, a corner location that abuts the Footprint Center’s main plaza and team store. At night, it glows a bright FanDuel blue, with an outdoor patio that includes large-screen TVs, sofas and heaters with dancing flames, a popular camera shot when Suns telecasts cut to and from commercials.
These were the precursors to two more sports facility sportsbooks: a two-story BetMGM location that opened in September on the Great Lawn tailgate area outside the Cardinals’ State Farm Stadium, and a 12,000-square-foot showplace that DraftKings plans to open at TPC Scottsdale in time for next NFL season.
A perusal of reports from state regulators makes you wonder why the nation’s four leading sportsbooks care enough about retail to make it such a high priority.
Of the $538 million wagered on sports in Arizona in September, only $4.6 million, or less than 1%, was placed at retail. FanDuel accounted for $2.5 million, while Caesars took in $1.1 million and BetMGM handled $380,000 in what was its first month of operation.
The busiest month to date for an Arizona retail book was October 2021, when FanDuel took $4.8 million in bets. A month later, Caesars hit what still is its high-water retail mark at $2.8 million. Those sportsbooks took in $115.8 million and $66.2 million through their apps in those months, respectively.
That’s reflective of the mobile vs. retail split nationwide.
In the 18 states that have both online and retail sports betting, the latter represented only 9% of $7.02 billion wagered in September. Outside Nevada, retail makes up about 5%.
And yet the leading sportsbooks have jockeyed for space in each of the five states that have included sports facility retail in their betting framework, convinced of a value not apparent from the numbers.
Legislatures in Arizona, Illinois, Ohio, Maryland and Washington, D.C., have granted teams and event operators the option to open sportsbooks at their facilities. Though only Arizona and D.C. are up and running, the rest soon will follow.
Caesars is set to open a 10,350-square-foot location at Rocket Mortgage FieldHouse in Cleveland when Ohio launches on Jan. 1. BetMGM also will open that day at Great American Ball Park in Cincinnati.
“It’s kind of the same reason banks still open branches,” said Jeff Lowich, vice president of retail operations at FanDuel. “It’s that physical brand where you can actually go. Even if you never go, just knowing that you could go kind of goes a long way sometimes. It builds up that brand trust and brand loyalty and brand awareness.”
FanDuel was the first of the sportsbooks to go big on retail when it opened a 5,310-square-foot location with 57 screens and 55 betting kiosks at the Meadowlands in July 2018.
DraftKings, its largest competitor, remained skeptical about the value of brick and mortar until two years later, when it agreed to develop a sportsbook near Wrigley Field. In April 2021, it went into business with the PGA Tour on a sportsbook at TPC Scottsdale, a resort destination that hosts the raucous WM Phoenix Open, played annually on the weekend of the Super Bowl.
“Retail is a means to an end for us,” said DraftKings CEO Jason Robins, who was in Scottsdale for a groundbreaking ceremony with PGA Tour Commissioner Jay Monahan last week. “If we didn’t think retail could help with online market share, we wouldn’t care about retail. Can this help us recruit new customers, better retain customers and make money at the same time? That’s what we have to figure out. If not, retail becomes less interesting for us in the future. But I don’t think that will be the case. I think it will play a role.”
BetMGM hopes for a large dose of brand exposure from its new facility in the coming weeks, when State Farm Stadium hosts a college football playoff semifinal and then the Super Bowl. Its location in a still-developing Phoenix suburb lacks the foot traffic of its downtown competitors, but on game days it beckons to as many as 8,000 tailgating on the Great Lawn.
Before each Cardinals home game, owner Michael Bidwill encourages his counterparts from the visiting team to get to the stadium 20 minutes early to join him for a tour of the sportsbook. Though NFL rules prevent owners and employees from entering during the season, the league has granted exceptions for those who have business there, so long as they don’t bet.
Kansas City Chiefs owner Clark Hunt, whose team plays in a state that hasn’t legalized and astride a border of one that has, visited before the season opener. Philadelphia Eagles owner Jeffrey Lurie, whose team plays in state that did not include stadium retail in its initial framework, toured when his team played in Arizona.
Many more will descend for the Super Bowl.
“Every owner I talk to, I tell them two things,” said Bidwill, who joined a coalition of Arizona teams and tribes to lobby for both retail sportsbooks and access to broker valuable statewide mobile licenses. “No. 1, copy the Arizona legislation. And, No. 2, come out and see this on game day — because it’s going to blow your mind.”
■ ■ ■ ■
A few hours before the Suns tipped off against the New York Knicks on a recent Sunday afternoon, a couple dozen fans settled into FanDuel-branded theater seats and high-top tables at the arena’s FanDuel Sportsbook while a few stood at kiosks, tapping in wagers ahead of the 11 a.m. MT NFL kickoffs.
Because the sportsbook is part of the arena, accessible from the street daily from early morning to late at night, all who enter must clear security. During games and other events, there’s also access from within the arena.
Fans entering through the concourse will find it not far beyond the vast atrium entryway, marked by a long blue wall with the FanDuel logo. A brightly colored ticker streams scores, logos and news across the top. Inside, 6,350 square feet are divided to allow for seating for 70, with room to move about.
There is an area with three rows of theater seats, facing a video wall that can show as many as 16 games. Behind that is a spread of high-top tables and a full-service bar. Off to the side is a betting counter with four teller stations.
There’s another section with still more screens, tables, stools and a work counter, ringed by 22 touch-screen betting kiosks, which offer nearly as robust a menu as users would find on the app. Two ATMs provide cash, the only way you can bet if you don’t have an online account. An unmarked door leads to a small private room reserved for VIP guests, with its own video wall, theater seating for six and setups for a private bar.
Those entering from the concourse must show an ID, which is scanned and recorded. Colored wrist bands allow them to come and go. Only those with tickets can get from the sportsbook into the arena.
With a full slate of NFL games going, the sportsbook served as a pregame hangout for a couple dozen fans who came early. It got busier leading up to tipoff, thinned out, then got busy again at halftime and after the game.
One of the reasons FanDuel does far more business than its Phoenix competitors likely ties to the NBA being the only one of the three most bet-on leagues to allow fans to come and go from a sportsbook during games.
Major League Baseball is fine with sportsbooks at its ballparks, allowing for them in restaurants or converted spaces that are part of the park, but requires that they be shut off from seating sections and concourses during games. The NFL won’t even allow them to stay open on a game day if they’re part of the stadium.
The Caesars sportsbook at Chase Field covers 22,000 square feet, with a picturesque patio and full-service restaurant, but you can’t visit the sportsbook between innings without exiting the gate and re-entering. BetMGM’s swanky outpost is about 300 yards across the parking lot from State Farm Stadium.
“I couldn’t imagine having this tucked away outside during a game,” said Dan Costello, Suns executive vice president and chief revenue officer, who watched as fans lined up to have their IDs checked 30 minutes before tipoff. “The compliance aspects are important. But if we’re going to be in this business, you might as well do it in a way that feels special.”
The rules have evolved in the past two years. When Caesars and FanDuel were designing their respective arena sportsbooks in D.C. and Phoenix, the NBA also had a rule that made it hard for fans to come and go during games. Caesars designed its two-story Capital One Arena location with a lobby-like downstairs for those who wanted to enter and exit quickly and an upstairs sports bar it has since co-branded with celebrity chef Fieri.
Temporary barriers initially separated the sportsbook from the concourse to comply with NBA rules.
“We just started to think about what it should look like when the NBA and NHL allowed folks to move back and forth freely,” said David Grolman, senior vice president of retail for Caesars Sportsbook. “We future-proofed it. … We sort of built it on the come that the NBA and NHL would buy into folks moving back and forth.”
Washington Wizards and Capitals owner Ted Leonsis, an early advocate of legalized betting, tells of how he convinced NBA Commissioner Adam Silver to reverse that initial decision. Leonsis invited Silver to a game, showing him the hassle required for courtside seat-holders to place a bet once they’d entered the arena. Soon after, the NBA lifted the restriction.
The degree to which the NBA has moved since then is evident at the entrance to the Suns’ uber-premium
Annexus Social Club, which serves fans with seats in the first two rows. Shortly before each game, FanDuel staff sets up a temporary betting counter where guests can place wagers. A screen shows odds updated throughout the game.
“We wanted to create an environment where if a high-roller wants to place a bet, it can be in our most premium club,” Costello said. “This club comes with its own valet. We have oysters on the half shell. Sushi. And you have betting tills over here. We don’t have to manufacture a high-end event.”
Costello envisions using the club to host parties around the Kentucky Derby or UFC pay-per-views, with FanDuel and the team entertaining their best customers, able to bet in a premium setting. Because so much betting is mobile, he also sees the potential to flip that script, airing March Madness games on the giant screens of the arena atrium and running promotions to drive attendees to the FanDuel app.
“This whole arena can transform to one big FanDuel event if we want it to,” Costello said. “And that’s our competitive advantage.”
■ ■ ■ ■
When Arizona Diamondbacks executives took Caesars retail operators on a tour of potential locations at Chase Field, they started at a spot that had been a TGI Fridays, which had a view of the field. They didn’t realize that its lack of an easily accessible street-level entrance would make it a non-starter.
When they moved on to a large brick building that had been a game-day only barbecue house, the Caesars group was smitten. Not only did it front the main entrance to the ballpark, it had room for outdoor seating during the relative cool of football season. Caesars could make it a showplace, with fire pits and a long stretch of TVs.
“You walk into the main gate and pass this fabulous sportsbook, and there’s a massive LED display outside with every game you could want to watch,” Grolman said. “Hopefully, people think it’s impressive and give it a try.
“We tried to build it as a stand-alone location where people would want to come to watch games.”
Opened in June, the two-story, 22,000-square-foot location features the full-service Guy Fieri restaurant downstairs, with a row of kiosks and a betting counter flanking the bar. A well-appointed second-floor lounge offers more of a high-end clubhouse feel, with areas that can be closed off to entertain Caesars Rewards VIPs.
Caesars, the Diamondbacks and concessionaire Levy all recognize that retail sports betting alone won’t make a ripple in so large a space, considering how easy it is for most Arizonans to bet from their home, car or golf cart.
On a recent college football Saturday, only a handful of tables were taken. As evening approached, the downstairs filled, but it was as a prelude to a ballpark concert by the Zac Brown Band. The kiosks and betting counter remained largely unused.
“Just because you have a sportsbook and a restaurant doesn’t mean it’s going to automatically fill up, even on an NFL Sunday or college football Saturday,” said Cullen Maxey, Diamondbacks executive vice president of business operations and CRO, who was among those grabbing a drink before heading to see the show. “It still takes work. The team is going to approach next year much differently. We’ve already got monthly calendars with things going on every day. I never did that in the offseason before. So the biggest thing we learned is that it isn’t just going to happen because it’s a football Sunday. I have to get out there and market it just like I do our baseball games.”
Caesars actually took more bets in April and May, when it operated from a few converted ticketing windows, than it did after the full sportsbook opened in June. Its busiest months came last football season.
“People who are local residents probably have an app or two or three, so they’re probably going to place those bets on their phone,” said Diamondbacks CEO Derrick Hall. “They won’t even get up to walk to a window or kiosk [at the sportsbook]. Same thing in-stadium. And that’s OK.
“This is just another category that draws fans to the area. So I want it to be more of a restaurant and sports bar feel, to have people come for hours at a time. I want them to stay there all day, watch games and place bets all day, however they choose to do that. And we’re starting to see it.”
■ ■ ■ ■
On a Monday night in nearby Glendale, the BetMGM sportsbook was doing all it could to drum up business with the Cardinals out of town — and country — playing the San Francisco 49ers in Mexico City.
Like Caesars and the Diamondbacks, BetMGM and the Cards opted to attack retail in a mobile betting world by building what they envision as the region’s best sports bar, 17,000 square feet in a sleekly designed two-story structure with a glass wall and upstairs patio, both overlooking the Great Lawn.
The downstairs features a U-shaped bar backed by a 265-square-foot video wall and a bright neon ticker. Two levels of tables surround the bar. A betting counter and kiosks are to the left. Upstairs is a vast patio with tables and kiosks, with an indoor area that can be used for meetings or set up to entertain VIPs.
The restaurant is by Flanker, an upscale sports bar brand that came through a relationship with MGM Resorts.
With the team featured on “Monday Night Football,” BetMGM turned the night into a promotional event. A local radio personality raffled off swag and Cardinals game tickets. Two retired Cardinals players made an appearance. Tables along the glass were reserved for about 30 invited guests, higher-value online bettors who got to spend time with the players and BetMGM hosts.
The buzz helped attract a few parents who had brought their children to the Great Lawn for a Cardinals-sponsored flag football clinic.
“You have to program the space to get people there, especially around football, which has a limited number of games,” said Matt Prevost, chief revenue officer at BetMGM. “We need to treat it almost like a startup restaurant that happens to have a sportsbook in it. It has to be an experience that is worth a drive.”
That the Cardinals even have a sportsbook in a league with the tightest restrictions is testimony to the creativity of Bidwill, who advocated for one when Arizona was crafting its sports betting framework two years ago, even though it was unclear what the NFL would allow.
At that point, most teams envisioned a sportsbook within its venue. Bidwill knew the NFL wouldn’t allow that. He probably could get away with operating Mondays through Saturdays and during the offseason, but that wouldn’t be nearly as attractive a proposition for an operator and sponsor.
Bidwill turned his attention to the Great Lawn, where he had ample space and was hoping for additional usage. He got the legislation adjusted to allow for a sportsbook within 1,000 feet of a venue, rather than in it, setting the stage for what would be an NFL first — and a hit with fans who have made
it part of their pregame routine.
“On game day, you’re standing in line,” Bidwill said. “It’s wall-to-wall people from three hours before the game. We’re still getting people used to coming out to the sportsbook Monday through Saturdays. But whenever we do an event on the Great Lawn, we fill it up. And whenever we have a game, it’s packed.”
The sportsbook operators point to benefits of stadium and arena retail that dwarf their relatively meager handle and revenue stream.
They offer a communal viewing experience that some bettors enjoy, which may nudge casual bettors to sample and to play more. They enable sportsbooks to interact with online users in a retail setting, creating an omnichannel experience sportsbooks all say they strive for. They give bettors a place to deposit and withdraw from their online accounts with ease. And they offer a haven for app-averse bettors who still insist on using cash.
They also can be fertile ground to get new bettors signed up for apps in the early days after a state launches, though the sportsbooks all say that benefit wanes quickly.
They may not make a lot of money, but they more than cover overhead.
“These are really nice brand impressions, too,” Prevost said. “The advertising effect of seeing a beautiful venue, with BetMGM branding and logos, in the shadow of State Farm Stadium in advance of the Super Bowl, the Fiesta Bowl, or a Garth Brooks concert — that’s a great place for our brand to be associated. It’s much more than a simple sign at a stadium. This is what our brand represents.”
■ ■ ■ ■
Norb Gambuzza remembers the way the mood shifted in the room when he told senior leadership at the PGA Tour that Arizona was moving to legalize sports betting, offering the tour the chance to open a sportsbook at TPC Scottsdale.
The faces around the table were like, wait, what?” said Gambuzza, the tour’s senior vice president of media and betting. “Jay, the steward of the brand, was very concerned. TPC Scottsdale is a big brand. And it’s an important brand.”
To break the tension, Gambuzza sent Monahan a mock PowerPoint deck that outlined his vision for what a PGA-tied sportsbook might look like. It began with a photo of a dingy, off-track betting location on 8th Avenue in Manhattan.
“This is our North Star,” Gambuzza joked. “We’re going for this.”
The sportsbook that DraftKings will erect is the antitheses of the betting parlors that many in sports initially feared. Located across the street from TPC Scottsdale’s stadium course clubhouse, it has the trappings you’d expect from an upscale resort: A full-service, indoor/outdoor restaurant in a space befitting the area, with VIP cabanas and fire pits to go along with the requisite video walls and betting kiosks.
“It’s unique, and in a way that makes sense,” Robins said. “If you’re somebody who likes to go play interesting golf courses and you’re also interested in betting, where else are you going to go in the country but this? I think it could end up drawing people from all over the world.”
Robins sees a parallel to the flagship sportsbook DraftKings will open at Wrigley, which it also sees as a tourist draw. Along with serving fans before and after Cubs games, it plans large events around the Super Bowl and March Madness, which the team sees as an opportunity to draw visitors to its mixed-use development in the offseason.
“That’s why you see us doing these two,” Robins said. “There aren’t going to be a lot of places around the country where you can do things like this.”
This, Robins and others have learned, has to be about more than in-person betting.
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