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Corner bars want a piece of the action as sports betting moves out of the shadows

With the spectacular growth of mobile sports wagering in Pa. and N.J., bars like Buffalo Wild Wings are transforming into virtual sportsbooks to tap into the new world of legalized betting.

Two Hands are better than one: Joe Hand Jr., left, and Joe Hand Sr., see an opportunity in legalized sports betting: They are distributing a new service, KonekTV, to bars that will stream betting information and other content, allowing sports bars to becom virtual sportsbooks.
Two Hands are better than one: Joe Hand Jr., left, and Joe Hand Sr., see an opportunity in legalized sports betting: They are distributing a new service, KonekTV, to bars that will stream betting information and other content, allowing sports bars to becom virtual sportsbooks.Read moreDAVID MAIALETTI / Staff Photographer

With the spectacular growth of mobile sports wagering in Pennsylvania and New Jersey, some bar and restaurant owners are looking to morph their venues into virtual sportsbooks to tap into the new world of legalized betting.

Buffalo Wild Wings, the national sports bar chain, has teamed up with MGM Resorts International to stream betting odds into its bars. With geolocation software, MGM can identify customers in the restaurant who are using its digital gaming platform, BetMGM, and offer promotions. The companies plan to test the new partnership at several Buffalo Wild Wings locations in New Jersey before a broader roll-out later in the football season.

And Joe Hand Promotions, the Bucks County provider of live content to public venues, has joined with a Las Vegas company to distribute a nationwide service that streams betting information into bars, along with exclusive content aimed at younger audiences, such as esports. The tech company, KonekTV, is founded by two Penn grads and is partly financed by Harris Blitzer Sports & Entertainment, whose properties include the 76ers.

“Gambling is here to stay, and the bar owners want in on that market,” said Joe Hand Jr., the president of the Feasterville company his father formed in 1971. “It’s our job to say, ‘We hear the need. We hear the interest. How can we deliver it to you?’”

Sports betting has moved quickly out of the shadows and into the mainstream following last year’s U.S. Supreme Court decision that legalized sports wagering outside of Nevada. New Jersey, Pennsylvania, Delaware, and 10 other states now have launched legalized sports betting in some form, and five other states and the District of Columbia have approved it. For states, legalization is a way to turn an unregulated underground activity into a new tax revenue stream.

Bar vs. casino

Some gaming licensees, such as SugarHouse Casino in Philadelphia and Parx Casino in Bensalem, have invested millions to create flashy retail sportsbooks, with dizzying arrays of television screens and lounge chairs to draw crowds for big games — and, the casinos hope, to consume the casino’s food, beverage, and other gaming attractions.

But most bettors are not laying down their money at tellers or kiosks at casino sportsbooks. Rather, internet sports betting, primarily on mobile devices, has already eclipsed betting at land-based casinos in New Jersey and Pennsylvania.

In New Jersey, which has overtaken Nevada for sports betting primacy, bettors have wagered nearly $3.8 billion since bookmaking was legalized last year, and 85% of the wagers are now placed online. In Pennsylvania, online sports betting started only at the end of May, but by August, it already accounted for 76% of the $109 million wagered.

Sports bars and restaurants want to capture some of those mobile betting customers before they go home, turn on the television, and open up their sports betting apps.

“It’s an exciting opportunity to make sure people still visit bars and have a great experience,” said Seth Schorr, a founder of KonekTV and owner and operator of Fifth Street Gaming of Las Vegas “A bar is often competing with somebody’s home, so at a minimum, you have to give somebody the same experience they can get at home — and hopefully something much, much more.”

Schorr and partner Sameer Gupta founded KonekTV to supply bars with live betting data and gaming content, such as mixed martial arts events or esports. The idea is to recreate some of the shared social energy of a sportsbook. They’ve tested the product at a few bars and restaurants in Nevada and California, including the Downtown Grand Hotel & Casino in Las Vegas owned by Schorr’s company. Joe Hand Promotions is now rolling it out in states with legalized sports betting.

Bar owners who sign up for KonekTV will stream the content through proprietary hardware, choosing from a menu of channels that provide betting odds and analytics or other entertainment. The betting data may be consensus odds or data provided by a specific sportsbook with which the bar has a separate arrangement. It can be customized to feature analytics on a popular local game. The venue owners earn money on advertisements scrolled on the screen.

» READ MORE: Rinkside wagering: Flyers, Wells Fargo Center make SugarHouse their official sportsbook

“In almost all cases, it’s either cost-neutral or a profit center with the bar based on their share of advertising revenue,” said Schorr. “That means different things based upon the size of the bar and the occupancy and the location.”

‘Uncharted waters’

Schorr and Gupta met years after they attended the University of Pennsylvania at different times, but they’ve found common ground in the Penn experiences.

“Sameer and I, both being Penn grads and spending a lot of time in Philadelphia, see it as our second home, along with Vegas,” Schorr said. “We’re big fans of the city and all its sports franchise.” (The website of their company, Commercial Streaming Solutions, features an image of an Eagles telecast.)

KonekTV’s investors include Harris Blitzer Sports & Entertainment, which owns the 76ers and several other professional teams, and the Sixers Innovation Lab, Schorr said.

Scott Keenan, a co-owner of Keenan’s Irish Pub in North Wildwood, liked what he saw during a test of KonekTV earlier this summer. He had hoped to install the devices in his venue, especially to attract more customers for “watch parties" when business slows after the peak summer Shore season.

“The main thing I want it for is the esports,” said Keenan, noting Comcast’s plans to build a $50 million, 3,500-seat arena in the South Philadelphia stadium district where competitive digital gamers can go toe-to-toe before a live audience. “It’s a big market.”

But Keenan said he was uncertain who would supply the betting data and the details of the advertising arrangement, so he is still uncommitted. “It’s such uncharted waters,” he said. “I just didn’t want to hook it up until those questions were answered for me.”

Independent bars and other sports bar chains might be inclined to take a closer look at KonekTV after the recently announced partnership between MGM and Buffalo Wild Wings, which has 1,200 outlets in 10 countries.

“I think the deal validates what we’ve been trying to say about sports bars getting some kind of gambling component in there,” said Joe Hand Jr.

Under the MGM partnership, Buffalo Wild Wings sports bars across the country will begin showcasing betting content on TV screens inside the sports bars, featuring live odds provided by BetMGM. The program will give customers limited time perks (such as enhanced odds and free bets) when the BetMGM app is accessed inside a Buffalo Wild Wings.

In states where sports betting is not legal, or in states such as Pennsylvania, where BetMGM is not a licensed operator, Buffalo Wild Wings is operating a free-to-play mobile-only football game that offers a “sports betting-like experience” with no stakes. Players can win prizes, including a trip to MGM’s Borgata Hotel Casino & Spa in Atlantic City. The business partners cleverly designed the contests as a cross-promotion: The prizes are available only to contestants who access the app while inside a Buffalo Wild Wings restaurant on certain days.

The disconnect

While some casino operators resisted online betting as a threat to brick-and-mortar operations, MGM regards mobile wagering as a means to build up loyalty among customers who spend more.

“Those customers that engage with us both online and in a land-based environment are much more active and frankly valuable,” said Matt Prevost, chief marketing officer for Roar Digital LLC, a sports betting and online gaming venture co-owned by MGM.

Out in the trenches, Joe Hand Jr. said his family’s business has remained relevant over the decades by embracing new technology — the business began in 1971 by staging closed-circuit events in big arenas with content delivered over conventional phone lines. He’s convinced that programs streamed on the internet will soon displace content that the bars receive on satellite dishes.

But first Hand’s sales force must convince bar owners — many of them men of a certain age — that the market is moving online, and younger customers want digital experiences, including televised events of esports teams fighting virtual battles on computers.

“I’m talking to a 60-year-old bar owner about streaming,” said Hand, who is also 60. “And he’s like, ‘How do you spell streaming? What is esports?’ It’s a generational gap.”