Restaurants Roll the Dice on Gambling Partnerships

In the same vein as national restaurant brands increasingly marketing to marijuana users as states continue to legalize the drug, the restaurant industry is aligning with sports betting to help boost revenue.

And with good reason.

The global sports betting market size is expected to grow at a CAGR of 10.1% and reach $140.26 billion by 2028, according to Grand View Research.

Sports Betting at the State Level

Approximately 30 states now allow some form of sports betting through retail or online sportsbooks. Specific rules still vary across states, but one area that remains unsettled is whether onsite sports betting in restaurants will become more widespread.

Even in states where sports betting is legal on your phone, most do not yet allow betting at restaurants. With that, many entities are looking to get in on the action.

The New York City Restaurant Association is one such group pushing hard for onsite betting. The association in late 2021 partnered with gaming company Elys Game Technology to develop a working model for restaurants once the practice is fully legalized. Like many other states, New York does allow sports betting, but does not have a framework in place for betting at restaurants. Also like other states, New York’s restaurant industry is increasingly pressuring lawmakers to move ahead with implementing clear rules (Cheddar, Feb. 11).

With that, states appear to be taking a measured approach.

Last month, the Ohio Lottery Commission published five pages of proposed rules for sports-betting kiosks in Ohio bars and restaurants, including one rule that restricted establishments to two sports-betting kiosks, which drew criticism from bar owners.

Chains On Board

Buffalo Wild Wings has already teamed up with MGM Resorts to promote the use of MGM’s smartphone gaming app in conjunction with brand promotions.

Additionally, interim Dave & Buster’s CEO Kevin Sheehan said last year that the chain is going through a “new phase of innovation, growth, and value creation,” and part of that includes sports betting.

Last week, Hooters of America announced an alliance with sports betting company Draft Kings and that it’s close to completing a deal with PointsBet, another sports betting firm. Hooters guests receive special offers via a QR code or can simply visit the Draft Kings site and use a promotional code.

Appealing to the increasing number of sports bettors across the country presents “an opportunity to drive new customers into our restaurants,” explained Sal Melilli, CEO of Hooters of America.

Further, Melilli expects the number of legalized-gambling states to grow, which would add sports betting to more Hooters nationwide. “The model is set. As fast as they become legal, the footprint is in place,” he said (Forbes, May 3).