Arizona’s new regulatory framework, which grants professional sports organizations similar control over sports-betting market access as casinos, should be a model for other states to follow, according to a senior executive with golf’s PGA Tour.
David Miller, PGA Tour vice president and assistant general counsel, admitted Wednesday that market-access rights were “never in the blueprint” for sports leagues, as they initially focused on securing royalties or integrity fees and official data mandates in the aftermath of the U.S. Supreme Court’s ruling permitting all states to regulate sports wagering.
But Arizona’s sports-betting market, which launched last month and requires online betting operators to partner either with an Indian tribe, a local professional sports team, PGA Tour golf course or NASCAR racetrack venue, has encouraged the PGA Tour to become more aggressive in lobbying efforts for similar frameworks in states that are considering legalizing wagering on games, including Ohio and Massachusetts.
“We’ve become more active,” Miller told attendees Wednesday during a panel discussion at Global Gaming Expo (G2E) in Las Vegas.
“That has opened our eyes to the potential of this area, and we would like to replicate at other properties what we have done at TPC Scottsdale.”
The PGA Tour venue has partnered with DraftKings for both online betting and development of a physical sportsbook at the host course of the annual Waste Management Phoenix Open golf tournament.
Five Arizona pro sports teams have similar arrangements with betting operators, while Phoenix Speedway, which is home to an annual NASCAR event, has a market-access partnership with Penn National’s Barstool Sportsbook.
Only the National Hockey League’s Arizona Coyotes, among the Arizona teams eligible for market access, has yet to announce a sports-betting partnership.
“It has been a really interesting evolution for us in the gaming industry,” Miller said.
“We initially jumped in … with an initial focus on integrity, data distribution … getting involved in governmental affairs and then we switch to a more content-focused stage of our involvement in this industry,” Miller said. “Market access was never really in the blueprint or the road map.”
Miller admitted the PGA Tour even thought it was a distraction when Monumental Sports and Entertainment (MSE) announced an agreement with William Hill, now part of Caesars Entertainment, to build the U.S.' first in-arena sportsbook in Washington, D.C.
When market access deals arose in Arizona, Miller said, it was the success of Monumental’s deal with Caesars at Capital One Arena that allowed the PGA Tour to agree to a partnership with DraftKings.
“With our goal in this area of generating more interest in our sport, generating revenue while doing so responsibly and with integrity, we felt getting into market access and partnering with operators for mobile and retail sportsbooks was a way to enhance our events,” Miller said.
“It’s also a way to enhance our facilities the other 51 weeks a year,” when major golf tournaments are not played, he added.
William Hill opened a permanent sportsbook facility earlier this year at the home of the NHL’s Washington Capitals and NBA’s Washington Wizards.
Under a 2019 D.C. law, retail and limited mobile betting can be offered at the city’s four major sports arenas, with BetMGM and FanDuel also set to open sportsbook locations at Nationals Park baseball field and DC United’s Audi Field, respectively.
Jim Van Stone, MSE’s president of business operations and chief commercial officer, said Monumental was in active conversations with regulators even prior to the U.S. Supreme Court overturning the Professional and Amateur Sports Protection Act in May 2018.
“It really is the right opportunity from a venue standpoint,” Van Stone told G2E delegates.
Van Stone said Monumental’s approach to choosing a sports-betting operator “was a little bit different in the fact that we own the sports teams, so we don’t share in any of the gaming revenues.”
He said the company looked at sports betting from a fan engagement perspective and how it could help generate revenues beyond professional sporting events and concerts.
“We normally see on an annual basis about 230 events a year, about 3m people through the turnstiles,” Van Stone said. “When we were doing our research, we projected we could increase visits to the arena by almost a million a year by having a fully operational brick-and-mortar sportsbook.”
“We are looking at this as an entire ecosystem play for us and hopefully sports betting is really one of those key drivers that allows us to sell more tickets, sell more partnership opportunities, sell more jerseys and really increase our culinary numbers.”
Van Stone said opening a retail sportsbook tied to the arena has been a “game changing opportunity.”
“I hope there are more states that onboard something very similar to what we have in Washington, D.C.,” he added, with Illinois and neighboring Maryland currently the only two other states along with Arizona that permit sportsbooks at sports arenas.
“Our leagues have been very supportive of this, but they have also given us very specific guidelines and rules and regulations that have really helped us jump into this a little clearer.”