The Feb. 9 announcement by Elys Game Technology that it was on the brink of building a sportsbook inside a Days Inn in Washington D.C. was met with surprisingly little fanfare. PlayUSA and other similar casino-focused news outlets wrote quick stories based on the press release, but nobody in the rather mammoth and intense mainstream D.C. press corps – usually so eager to pounce on revolutions in the spread of “vice” – took notice.
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Sports betting kiosks as common as Lottery
This news item should have been a head-snapper. Allowing live sports betting in casinos is one thing. Even mini-sportsbooks that have opened in sports bars made a certain amount of sense. But now someone wants to put a sportsbook in a motel? What’s next – sports betting at the Circle K? The Kroger? The mall?
Well, yes. That is literally the plan.
Here’s what Elys CEO Michele Clavarella told me Friday:
“Everywhere there’s a lottery ticket machine, everywhere there’s a lottery point-of-sale where you can select your ticket or Quick Pick or whatever, wherever there’s one of those, there should be a sports-bet kiosk because it’s the same thing.”
Oh, but that’s just the beginning. Elys, a publicly traded company, has origins in Italy where some 2,500 of their sports betting kiosks under the Newgioco brand, have been in operation for decades in all manner of non-casino settings. This D.C. effort to open up in a motel lobby – where lottery tickets are not typically for sale, by the way – is the camel’s nose under the tent of offering live sports betting opportunities just about anywhere.
“Leisure bettors” love sports betting kiosks
You may wonder what the big deal is, given how many states now allow mobile sports betting. Isn’t anywhere you can get Wi-Fi or data service a sportsbook these days?
Well, sure, if you want your betting to be tracked and your winnings taxed. Betting at an Elys location – either via a kiosk or through a cashier or other live person accepting the bet – would be cash only. In industry parlance, this is known as “leisure betting,” outlets placed in “retail” outlets for the casual player who doesn’t want to trek into the depths of a proper casino but also prefers not to play online, either.
The odds at any given moment are basically the same on the mobile apps or at, say, your neighborhood laundromat, Clavarella says.
“The only difference is that online you have a gaming account. In retail, you have no gaming account. It’s anonymous. You go in, pay your money, you get your ticket… They don’t want to have an account with FanDuel and DraftKings and BetMGM. That’s too many different accounts. People don’t want it, so I anticipate that the retail market in the United States is going to balloon over the next few years.”
So far, such “non-traditional” settings for sports betting are only allowed by law in the District of Columbia, Maryland and Ohio. In Ohio, nearly 1,000 locations – mainly bars, bowling alleys and convenience stores – are up and running; major grocers Kroger and Giant Eagle have licenses for sports betting kiosks but have yet to open them. Ohio law also limits betting options at kiosks to spread, over/under and moneyline wagers as well as parlays with up to 4 outcomes. There will also be a tracking mechanism of some sort because the law limits bettors to $700 in bets per week across all kiosks.
D.C.’s plans for sports betting
In D.C., Elys already has kiosks at two D.C. bars, Grand Central in trendy Adams Morgan and Over/Under, a mile from the U.S. Capitol. Clavarella calls these partnerships “proof of concept” – meaning they’re the experiment to show that their technology works and can be deployed elsewhere, too. (The coming motel sportsbook – it is presently a Days Inn but will be rebranded by new owners by the time Elys begins operating there – will actually have a lounge off the lobby with “maybe a Jumbotron TV and so on,” Clavarella says.)
Clavarella says the profit margins for such retail sports betting is larger in part because most people place their bets on the go before a game and are, thus, locked in on the odds they’ve chosen. There’s no cash-out option during a game and, while it’s possible to place bets during games as is done on the app, it’s more difficult to catch fast-changing odds on a retail betting situation. Thus, he says, bettors can’t hedge the way they do on the apps.
Retail bettors also aren’t usually as sophisticated as sports betting app users, many of whom have software that helps them find favorable odds across many sportsbooks and catch in-game shifts in real-time. Elys customers can concoct their bets on an app that generates a QR code for the bet, but then they must bring their phone to the 7-11 or whatever, pay for the bet, and scan the code before the bet is actually real. A lot can happen in the betting line during that process.
“As a result, we’re always getting a 12 to 15 percent average hold, which is very good considering in the online business, they get a 4 to 6 percent hold,” he says.
Sports betting vision worth replicating
There are plenty of details to be worked out. If the kiosks are in places where people of all ages can be, they must have some method of ascertaining a bettor’s age and to guard against the use of the machines in money laundering schemes. The two locations that Elys now operates are bars, so the onus of ensuring everyone is of age falls to the person at the door. At one point, Clavarella mentions to me a video surveillance system that could be used to track and address problem gamblers. Both elements would seem to pierce the claim of being able to give bettors anonymity.
Nonetheless, a proliferation – and a revolution – is afoot. I dug hard to try to figure out when Nevada first allowed slot machines in non-casino venues and to see how that was received, but the best I could see is that it started as early as gambling was first legal.
That is, however, the one thing that makes a lot of Vegas visitors queasy, when they hear the jingle of slot machines as they step off the plane or venture away from the Strip to discover gambling available at the car wash or the Albertsons.
And that is the template that sports betting firms like Elys envision replicating.