With Pennsylvania online sportsbooks proliferating and taking off, retail land-based books may seem so yesterday in the universe of sports betting.
But they are still working.
Retail sportsbooks are part of a larger plan by some operators to create more foot traffic and recruit new players.
They also attract customers likely to eventually download sports betting apps and wager online.
For instance, the recently opened FanDuel Sportsbook at Valley Forge Casino Resort helped make for a record second quarter at the facility in suburban Philadelphia owned by Nevada-based Boyd Gaming Corporation.
Valley Forge and FanDuel doubled down in late July, launching an online sportsbook, but too late for the Q2 report.
Explaining the appeal of the retail sportsbook at Valley Forge
During an earnings call this week President and Chief Executive Officer of Boyd Gaming Keith Smith explained:
Valley Forge achieved a record second-quarter… performance boosted by strong growth in slot volumes and contributions from the FanDuel Sportsbook that opened in March.
Following Boyd’s policy of not breaking out exact quarterly numbers or providing breakdowns for a specific property, White did not quantify the actual performance figure known as EBITDA. The acronym stands for earnings before interest, taxes, depreciation, and amortization, and is one measure of a company’s overall financial performance.
But Boyd’s overall second-quarter revenues were $846.1 million, up 37.2% over the previous year. Boyd bought Valley Forge in September of 2018.
For Valley Forge, sportsbook is about new traffic and a new kind of customer
Smith’s investor call continued with some details of the strategy:
“We’re not in a position to really talk through [sports betting revenue] in detail. Cause we look at sports betting, what I call kind of the vertical itself of sports betting, for our properties in Mississippi and Valley Forge, you know, the profit is nice and it’s incremental.
But it is really about the incremental traffic it drives into the building that supports the casino, whether it be table games or slots, that supports the restaurants and supports other parts of the building. We’ve seen good traction. We’ve seen good foot traffic across the three operations that we’ve opened thus far.”
Retail sportsbook brings in a new kind of customer
Boyd spokesman David Stow told PlayPennsylvania that, while the company is “real happy” with the numbers, they are even happier with the by-product of the retail book.
“We’re simply attracting a new and younger customer,” said Stow.
The added foot traffic of new customers means revenue increases elsewhere in the property, according to Stow. He pointed out the property recently added 250 additional slot machines.
Given the proximity of Philadelphia and FanDuel’s established customer base in New Jersey, Boyd sees “incredible growth potential” and the opportunity to grow the customer base for the casino.
“Our goal was a revenue growth opportunity with more traffic. That’s exactly what we wanted.”
Replicating the plan, Boyd, which operates 29 casinos in 10 states, plans on opening four more retail sportsbook locations across the country before the start of the football season in September.
Retail sportsbooks should prime customers for the addition of online books
The company hopes to eventually add online sportsbooks in Iowa and Indiana, Stow added.
“The true potential of sports betting is mobile. We’re real optimistic.”
Stow said Boyd sees its brick-and-mortar sportsbooks working in tandem with plans for adding online operations.
FanDuel and Boyd have a national agreement for operating both online and retail sportsbooks.