LAS VEGAS - Six years after they were permitted in casinos outside Nevada, retail sportsbooks have increasingly shifted from an exciting new opportunity for brick-and-mortar casinos to a low-margin amenity, a panel of industry executives said Monday.
Retail sportsbooks were considered a novel way to attract customers to brick-and-mortar casinos in the wake of the May 2018 Supreme Court decision that struck down the federal sports wagering ban. But with few exceptions, these books are now being viewed as a way to attract customers to more lucrative casino games and food-and-drink offerings and less as a potential standalone revenue generator.
“There is less need for the sportsbook and more need for distribution,” said Caesars Digital SVP Dan Shapiro during a panel at the Global Gaming Expo conference in Las Vegas, Nevada on Monday.
At Caesars properties in Nevada and nationwide, this has meant more kiosks spread around the casino floor and less dedicated space for traditional sportsbooks. Shapiro said customers are increasingly looking to place bets quickly and conveniently without having to walk to a counter and wait in line to place bets.
Besides Caesars Palace, which maintains one of Las Vegas’ more prominent sportsbooks, Caesars has deemphasized dedicated sportsbooks and prioritized readily available kiosks.
At the Flamingo across from Caesars Palace, the company closed a dedicated sportsbook earlier this year and replaced the seating with more slot machines. As part of the 2023 renovations of the former Bally’s casino into Horseshoe, Caesars didn’t include a dedicated sportsbook with seating, instead opting for a sports bar restaurant.
While the Superbook at the Westgate Casino next to the Strip and Circa Sportsbook downtown remain sports betting “destinations,” much of the rest of the country’s brick-and-mortar gaming properties are using less space for stand-alone sportsbooks only a few years after many casinos were permitted to open them.
“The sportsbook is going to continue to get smaller and sports betting is going to be spread more throughout the property,” Shapiro said.
Rise and fall of retail betting
The court’s 2018 decision that allowed states to legalize sports betting was one of the more consequential developments for legal gambling in decades, allowing sports gambling, long fought by major American sports leagues, outside Nevada. Within five years 38 states had approved or opened some form of legal wagering on sporting events.
The media and public interest around sports betting, fueled by billions in marketing, free bets, and other promotions – not to mention the (eventual) encouragement by the leagues themselves – built tremendous hype around legal sports betting.
Speaking at Monday’s panel, Penn Entertainment SVP Justin Carter said his company’s stock price reached record highs in 2021 largely due to excitement around sports betting. He said sportsbook operators were scrambling to set up TVs and betting windows to have something they could promote as an in-person sportsbook.
Caesars increasingly views retail sportsbooks at most of its properties more as transactional area rather than a destination, Caesars Digital SVP Dan Shapiro said during today's G2E conference
— Ryan Butler (@ButlerBets) October 7, 2024
However, recent growth has increasingly come via online wagering. Mobile sportsbooks have seen their share of digital wagering rise in most states with both in-person and online betting sites, as online books offer more bet types and digital gaming platforms continue to improve.
Major sportsbooks including DraftKings, FanDuel, BetMGM, Caesars, Hard Rock, and ESPN BET also offer mobile betting platforms using in-house technology, which allows thousands more bets than when sports betting outside Nevada began six years ago.
Gaming execs at Monday’s panels said their respective companies are making sure in-person kiosks have the same options as the mobile books, including popular (and lucrative) single-game parlays. Anecdotally, many casinos see chairs brought to kiosks for bettors spending as much as half an hour placing bets.
While kiosks may become a larger part of the in-person sports betting experience, industry officials believe that the money invested in maintaining an in-person sportsbook – and the valuable floor space spent on a low-margin game – will become more exception than the norm.
Future of retail sports betting
That’s not to say in-person sportsbooks have no future, industry stakeholders say. They generate excitement on a casino floor and can attract a younger customer than slot or table game players.
Caesars outfitted retail books at most of its major properties in states that permitted sports betting but has reconfigured its retail sportsbook at Rocket Mortgage Fieldhouse in Cleveland and pulled out of a deal to open a book at Raynham Park race track in Massachusetts.
Penn is renovating its former Barstool retail sportsbooks under its ESPN BET brand, but that investment is an exception and comes as investors push the company to focus on its brick-and-mortar gaming. FanDuel and DraftKings, the two U.S. market share leaders, lend their respective brands to a handful of retail books across the country, but the two remain focused on digital betting.
"Our stock price reflected the excitement of sports betting" said Penn Entertainment SVP Justin Carter during today's G2E conference, referencing the high for $PENN set in the first few years after sports betting was permitted outside Nevada
— Ryan Butler (@ButlerBets) October 7, 2024
In the decades when sports betting was confined to Nevada and before the existence of online betting, retail books typically held around 8%. FanDuel announced it was targeting a 16% hold at a recent investor presentation.
The ability to market and offer thousands of bets for hundreds of sporting events and dozens of leagues from the convenience of virtually anywhere drives online betting’s growth. The larger potential margins from parlays and single-game parlays further justify this emphasis.
In the meantime, retail sportsbooks will continue to exist as a way to draw customers with hopes they stay and eat at casino restaurants or gamble on other games. But they will increasingly have to try to replicate the convenience of mobile wagering, industry officials say.
“It's becoming very transactional,” Shapiro said. “What we're focusing on now is less on the ‘sports cathedrals’ to distribution across the casino.”
