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Burgers and Bets: Restaurants Get in on Legal Sports Betting Action

Super Bowl LVI is shaping up to be the biggest gambling event in sports history. A total of 31.4 million American adults are expected to place a bet on the Bengals-Rams matchup, up 35 percent from last year, according to the American Gaming Association. We're also not talking about people placing a few bucks on homemade betting squares here. Bettors are estimated to be putting down at least $7.61 billion in wagers, which is up 78 percent from 2021. 
Adding to what feels like a gambling frenzy are a number of high-profile bets that are themselves breaking records and shifting boundaries. Rapper Drake is placing a series of bets worth $1.3 million and, just to make it extra-speculative, is betting with bitcoin. Jim "Mattress Mack" McIngvale, meanwhile, has reportedly placed a $4.5 million bet on the Bengals to win the Super Bowl. The megabet is believed to be the largest mobile sports bet in history.
Behind the eye-popping sums and sheer volume of bets, however, is the shifting landscape of legal sports betting. After a 2018 Supreme Court decision opened the floodgates to state legalization, a patchwork of laws has knitted itself across the country — over which an increasingly mobile-based gaming industry has smoothed and accelerated wider adoption. A total of 30 states and Washington, DC, now allow some form of sports betting through retail or online sportsbooks. Another three are still rolling out their programs, and at least seven have bills in the pipeline. 
Yet, specific rules still vary across states, and 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 the industry exploding across the country, many restaurants are trying 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 Elys Game Technology, a gaming company with a base in both Europe and North America, 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. 
"Our bars and restaurants have been devastated over the last 18 months and are in desperate need of additional revenue streams," said Melissa Fleischut, president and CEO of the New York State Restaurant Association, in a statement on the agreement last year. "Elys Game Technology is experienced in bringing premier sports betting to bars and restaurants all around the world and has shown how beneficial this can be to the bottom line of many." 

Going Mainstream 

Ely is what's called a "management service provider," and they're essential to making sports betting possible at restaurants. Unless restaurant owners want to become bookies, third parties are key — and indeed legally necessary in most cases — to set up a program. This is exactly what the company is doing at Grand Central Restaurant and Bar in Washington, DC, which it says was the first restaurant in North America to offer licensed sports betting. 
"It's not me with a visor at a corner table taking money on the [Buffalo Bills]," said Brian Vasile, owner of the Grand Central. "It's not like that. Sports wagering has evolved and become mainstream. It's all software driven. You need a management service provider." 
When the DC Council passed a bill in 2019 allowing sports betting at restaurants, Vasile said mobile betting companies came knocking at all the bars and restaurants in town. "It was a little bit of the Wild West," he said. "Whether it was FanDuel or DraftKings, they were all asking if restaurants wanted to get involved, but no one was really sure of what the landscape was going to look like because the regulations just came out and were like 800 pages long." 
Indeed, nearly three years later, Grand Central is still the only restaurant in the District of Columbia to receive a license, according to the DC Office of Lottery and Gaming. A few have submitted applications and withdrawn them, and a strip club is currently under review. But there hasn't been the wave of adoption many expected given the interest from gaming companies. 
Vasile chalked up the delay to the process being a "big lift." He said the application requires a non-refundable $100,000 deposit, which is a difficult commitment for a small business, especially during COVID. "The tagline I use is: you have to gamble to gamble," he said. 
Whether Vasile's bet on sports betting will pay off is still an open question. Since launching in October 2021, the program has helped boost sales upwards of 10 percent, but it's also come with a number of added costs, including new investments in security, surveillance, and management. According to the Office of Lottery and Gaming, the restaurant generated more than $200,000 in gross gaming revenue through December on $1.4 million in total bets.  
"Sports wagering is relatively new, and it's always been reserved for the big corporations," he said. "The Class B [license] gives the brick-and-mortar restaurants the opportunity to break into a space that's been dominated by corporations for so long, but obviously you can't do it alone."
Washington, DC, is well ahead of most jurisdictions, and the boom in restaurant-based sports betting could still be years out. A lot of states, like Ohio, only recently legalized sports betting,
 and is still working out the kinks to allow it at restaurants. In Massachusetts, lawmakers are working on a legalization bill, and restaurants in the state are trying to get in on the ground floor of the process rather than being considered as an afterthought. 

A Sportsbook in Every Pocket 

In the meantime, some restaurants are moving ahead with novel approaches to embracing sports betting, despite the lack of state laws allowing the practice. In Philadelphia, for example, at least two restaurant projects are in the works that aim to split the difference. While they won't allow betting onsite, they will facilitate and encourage mobile betting at their locations. 
One of those projects is from the notorious sports-blog-turned-sports-betting-empire Barstool Sports, which is backed by Penn National Gaming. The company is currently working on opening a bar in Center City Philadelphia that won't have a gaming license but will serve as a gathering place for sports bettors. Barstool has offered few details beyond that basic premise, but the other project in the works in Philly offers a clearer picture of what that could mean. 
Backed by Stephen Starr, one of the city's top restaurateurs, a restaurant called Bankroll is currently in the works that aims to "redefine how sports and other live events are watched." What this means specifically, according to one of its biggest financial backers, is that the restaurant will encourage patrons to bet on their phones while they're on the premises. 
"In the state, anywhere you have a cell phone signal you can place a sports bet," said Paul Martino, general partner at Bullpen Capital, which is backing the project. "If you have a cell phone in your pocket, you have a sportsbook in your pocket, no matter where you go. You could be in your pajamas. You could be at a restaurant in Philadelphia. So what if you built an experience knowing that people are going to do this anyway?"
He explained that Bankroll aims to provide a model for the "next-generation physical venue for live sports entertainment," and that he suspects others will soon copy the idea. He also noted that Bankroll's model avoids the negative backlash that comes with trying to open a casino.
"I think what we're pioneering here with Bankroll is that there is a new way to get involved in sports betting that doesn't bring in a lot of those elements that you'd be worried about with a casino," he said. 
Even if Bankroll wanted to offer full sports betting along the lines of Grand Central, that opportunity was shut down when the local zoning board nixed a plan to bring sports betting to a Chickie’s and Pete’s in South Philadelphia. Apparently, local residents weren't too keen on the idea of people betting their paychecks at a local restaurant. Now, of course, people can bet their paychecks at home in their pajamas — or soon enough, over a burger and some fries.  
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