Lee Richardson MBA, Founder and CE of research firm Gaming Economics, believes that sports betting could add significant value to the growing, highly competitive $28bn bar and tavern business in the US. Talking exclusively to SBC Americas, the industry analyst explained that it’s easy to understand why this retail channel is such a natural fit for sports betting.
Many bars and taverns will show live sporting events on TV and will often plan their promotional schedules, particularly at weekends, to highlight, and promote, such events. By also providing their patrons with the ‘on premise’ means to wager on those live sports events, from the comfort of the bar, this clearly provides, for the bar-owner, an additional opportunity for increased dwell-time, extra footfall, high levels of fan-engagement and improved F+B spending patterns.
One of the best-proven ‘on premise’ means are self-service betting terminals (SSBTs), which enable the retail sports betting consumer to self-select and strike their own sports bets. This is done through a networked terminal, typically consisting of a touchscreen, barcode scanner, under-counter unit housing a contactless card reader, cash acceptor and receipt printer.
With the ability of SSBTs to offer and support a wide variety of bet types and markets – and to do so in multiple languages and with a variety of payment mechanisms – operators typically find gross win margins from bets struck on SSBTs to be well above average due to the nature of player betting patterns and above-average selection of higher margin multiple/parlay bets by the player.
Since the introduction of retail SSBT units in New Jersey in 2018, one SSBT provider saw its operator-clients recording a 15% gross win margin on bets accepted through the terminals, contrasting the more normal 7% experienced through alternative betting channels, such as a mobile sports betting app. For operators, SSBTs are an important element of the retail sports betting landscape, with multiple options for retail placement, and location.
In particular, SSBTs have good scope to be customized to deliver a user-friendly, easy-to-understand interface with extensive menu functions for markets and bet-types. For novice bettors, especially, SSBTs helps remove the uneasiness of acknowledging to a human clerk that one is unfamiliar with how to place a bet. So, as they’re convenient, unobtrusive, immediately to hand and easy-to-use, consumers really like them, too.
Hospitality sector under-represented
In general terms, the hospitality sector is currently ‘under-represented’ in terms of lottery retailer type, thus providing a potential new retailer channel, for both existing lottery sales and the new opportunity sports betting brings.
Late last year, Montana passed sports betting legislation, similar to that passed in Washington DC, in which sports betting would be potentially available through its roughly 1,400 retailers; over one-in three of Montana Lottery’s existing, active retailers are already located within the bar and restaurant sector.
Indeed, to obtain a sports betting terminal(s), a Montana hospitality establishment will need to hold a liquor license, in addition to a new Lottery Sports Wagering License. If approved, these to-be-licensed hospitality businesses will be free to install branded Sports Bet Montana terminals, and which are expected to be operational from spring 2020.
This could be a highly-material launch within the hospitality sector, as the North American Association of State and Provincial Lotteries has long advocated that the Lottery industry’s strong relationship with bars, pubs, taverns and restaurants make it best positioned to implement sports betting.
SSBTs appeal to a very broad demographic in such retail settings, easily enable a variety of important operational, and regulatory, requirements, plus they have an ability to take both digital and cash payments.
According to the Federal Deposit Insurance Corporation, there were an estimated 55 million ‘unbanked’ or ‘underbanked’ adults in the US in 2018, who account for around 22% of US households. Clearly, for this group of consumers, cash remains a necessity or strong preference, including their discretionary expenditure on wagering.
‘We can empower consumers’
Granted, the current trend in gaming is firmly toward digital payment processing and American Gaming Association president and ceo Bill Miller, speaking to a January 2020 NCLGS Conference, recently discussed this very point.
“With today’s technology, we can empower consumers with easy tools to set budgets, time limits, and other safeguards that promote responsible gaming,” Miller said. He told the recent NCLGS conference audience that digital payments also made it easier for law enforcement to identify customer identity and backgrounds, and their source of gambling funds. Nonetheless, cash remains king among a good proportion of bar and restaurant patrons.
Existing US-facing suppliers, with alternative US-designed offerings and a variety of retail settings, are already currently operating in Nevada, New Jersey, Pennsylvania and Rhode Island, but, to date, at much lower penetration rates when compared with Europe.
This will change, and quickly, from 2020 onwards.
To see if sports betting is available in your state, or when pending legislation might enable its arrival, click here: https://www.legalsportsreport.com/sportsbetting-bill-tracker/