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In today’s rapid changing US landscape, the opportunity to own many types of businesses is often both a professional and legal challenge. No doubt the opportunity to start your own local sportsbook should lie at the top as the ultimate Mt. Everest challenge.
Meet Shane August and his quest to open up probably what could be termed as the nation’s first “independent sportsbook” in Washington D.C. Independent, in that it differs from a giant DraftKings Sportsbook or a FanDuel operation being there are no plans for national advertising or corporate sponsorship deals with NFL teams. No multi retail outlets targeted among several US states.
Entrepreneur August and his team backing Handle 19 are planning to open the US first independent retail sportsbook sometime in November, perhaps by Thanksgiving. It will join the heralded other retail sportsbook in the DC area, located within the Capital One Arena operated by William Hill. To start operation August expects the D.C. Lottery to issue him a Class B license for wagering.
August is hoping his venue can inspire similar locally community-focused sports betting operations around the country. He said “It’s bigger than just entering the sports wagering arena as an independent operator. It is about breaking ground and serving other groups.”
Legalized sports wagering began in D.C. in December 2018. It took regulator the D.C. Lottery a year thereafter to go live, allowing for sports betting app. The lottery’s GamBetDC launched in May 2020, and the first retail sportsbook at a pro sports venue in the US (Capital One Arena) went live in late July.
August would have preferred to be “the first” in D.C. but major opposition from the community where he was planning to build the sportsbook halted progress.
Many voiced their displeasure during an earlier virtual Advisory Neighborhood Commission meeting. Handle 19 applied for a liquor license and opened a heated discussion among neighbors in the mixed-use neighborhood about whether a sportsbook was a proper fit. Twenty local residents voiced opposition to Handle 19 during the meeting, according to Capitol Hill Corner. Many were concerned about the potential social ills and security risks a sportsbook might bring to their neighborhood.
The neighbors voiced their concern about having a sportsbook built in the same neighborhood occupying elementary schools and day-care centers. Another concern was if a sportsbook could potentially bring crime to their upscale community. “I don’t think it’s going to work because we will not let it happen,” one person was quoted as saying in the Capitol Hill Corner.
Rather than wait for the Alcohol Beverage Control Board decision on November 12, August is taking the interim time to both educate the community on the positive aspects of the development and the residents about the new popularity of sports wagering.
The Capitol Hill space will be a comprehensive three-floor, 6000 ft. entertainment, food, and beverage facility. On the street level, there will be a full-service sports bar and restaurant. It will be housed between a Las Vegas-style sportsbook on the top floor and an area with odds boards, a cash cage, teller windows, and kiosks on the basement level. There will also be kiosks on the restaurant and sportsbook levels. Initially, patrons will be able to place bets via kiosk or at the teller windows. Thereafter a goal is to have on-site mobile, allowing bettors to enjoy the high-end sportsbook and take part involving in-play wagering from the comfort of their own table or seats.
Handle 19’s sports betting software platform will be run by USBookmaking, with sportsbook operations in New Mexico and Colorado. USBookmaking is largely known for being an industry trendsetter and fits the Handle 19 profile well. Also groundbreaking for USB was Sky Ute’s digital platform in Colorado as the first statewide tribal sports betting app to go live anywhere in the US.
The answer to chasing a potential dream of opening your own sportsbook like you might pursue opening a restaurant is a great deal trickier.
The licensing requirements differ from state to state and in this case of Handle 19 fall into a restrictive area involving D.C. legislation. This group was approved for a Class B license, which “authorizes physical and mobile sports wagering at businesses located within the District. All wagering, including mobile, offered by a Class B Operator must be conducted within the physical confines of the licensed location.”
Another large question is competition. Which specific companies are you competing against and exactly “where” are you competing for bettors? As the market continues to evolve and nearby US states continue to legalize sports wagering, the competition for customers can be expected to dramatically increase.
For example, we are seeing this currently happen involving Indiana losing some traction to new opportunities for neighboring state Illinois. It is likely voters will approve sports wagering in Maryland in the upcoming November 3 election. Should that happen, that would influence any DC sportsbook, especially potentially troublesome for any independent operation.
Not at all to sound negative but the main concern as it should be for any sports wagering operation is the bottom line. Unfortunately, it often cannot be accurately forecasted. Like for bettors, this is a gambling and risk business, not a retail consumer packaged goods operation.
By history, well-run sportsbooks have been known to produce an approximate annual 6-8% profit margin. Processing millions of dollars of bets add to the potential of success among both individual winning and losing days. A traditional casino would not be dependent upon its sportsbook or racebook for survival. Not having the higher-margin profit potential outlets like slot machines or certain casino table games is a weighing factor.
Handle 19 was wise in including a liquor license and to also sell food plus offer other entertainment options as part of their overall business plan. Calling upon USBookmaking’s vast experience launching this type of operation is also a good partnering asset involved.
Another factor our current Covid-19 pandemic period teaches us is “timing”. Online wagering is hitting record threshold levels for sports betting approaching 85-90% throughout several US states. Those numbers are not expected to dissipate for a while and not dramatically decline even when the Coronavirus eventually comes under control.
Shane August and Handle 19’s hopeful success could be a beacon for other independent groups entering the market in other US states. The key may be weathering a prolonged storm plus finding creative and unique ways to compete in an expected sports wagering landscape.
Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
Email: [email protected]
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