In-Arena Sportsbook About Branding – Not Revenue – for William Hill

Capital One Arena

Monumental Sports & Entertainment (MSE) has announced that William Hill (WIMHY) is set to become its official sports betting partner. The British gaming operator plans (pending an existing lawsuit and licensure from the state lottery) to open an “all-purpose sports betting complex” at Capital One Arena before the end of 2019 (William Hill CEO Joe Asher says early ’20 is more likely). The D.C. venue hopes to be the first professional sports arena in North America with a retail sportsbook on its premises. Illinois has also passed legislation that will grant venues within the state the rights to host a sportsbook.

Howie Long-Short: For as much media attention as this story has gotten, the partnership is relatively inconsequential to William Hill’s bottom line. Phillip de Winter, Head of Business Development at FanHub, said to “look at the international markets. 90% of sports betting revenues come from mobile. The money and future is in mobile.”

That’s not to say the deal is insignificant to the English bookmaker. de Winter explained that “retail stores are as much about branding as anything else. [William Hill] is a big player in Europe and in other markets, but they lack brand equity in the U.S. Having 20,000 people walk past their store in a stadium is great marketing for the company.” For that reason, de Winter believes we’ll continue to see WIMHY open new stores in the U.S. As it currently stands, William Hill operates 143 locations across ten states.

The U.S. market has become increasingly important to European-based gaming operators. Sara Slane, founder of Slane Advisory, explained that “stringent [domestic] regulatory changes have forced [U.K. based] gaming operators to close down thousands of storefront shops. In addition, recent restrictions on advertising and higher gaming tax rates in numerous European countries have compelled global operators to diversify [their business] and double down in growth markets.”

It’s important to point out that Monumental Sports & Entertainment is not a direct stakeholder in the on-premises betting operation. The company will not take bets, share in the book’s profits or set lines; it will simply serve as the landlord to the gaming co. MSE presumably will profit from the in-stadium advertising spend William Hill has committed to as part of the deal.

The addition of a retail sportsbook could change the pre-game, post-game and half-time (at least for Capitals ticket holders) experience, but those concerned it will draw fans away from the game and potentially impact the home-court/ice experience can relax. de Winter reminds, “to place a bet in-person at a stadium means that the fan must get out of their seat. If the action is happening in real-time, that fan is missing plays. During game play, fans are much more inclined to log-on to an app and place a bet from their seat as opposed to potentially missing the highlight of the day.

D.C. CFO Jeffrey DeWitt said the plan is to have mobile sports betting in place by early 2020. A lawsuit stemming from the D.C. Lottery’s decision to award the gaming contract to a single operator (Intralot) without a competitive bidding process is holding up the roll-out. Once sorted out (and licensed), William Hill will be able to introduce a mobile sports betting application to fans within a two-block radius of the arena.

Fan Marino: NBA bylaws prevent teams from offering retail sports betting inside of the arena, so every entrance to the William Hill sportsbook – from within the building – will be closed during Wizards games. Ticket holders who wish to place a bet can do so via a mobile application. The alternative will be to exit the arena and enter the sportsbook from the street. It’s unclear if Capital One Arena intends on permitting re-entry for those leaving the game to place an in-person wager.

Capitals fans should be able to place bets in-person without exiting the building. The NHL has not voiced opposition to the idea.

The in-stadium sportsbook will be busiest on days the building is hosting games, but MSE hopes the place turns into a destination when the home teams aren’t playing. The book will be open from 9a-1a, with the public able to enter from the arena’s exterior.

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Author: John Wall Street

At the intersection of sports & finance.

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