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Published on May 06, 2024
Dave & Buster's Dives Into Betting with Arcade Games, Stirring Legislative Pushback in Illinois and Concerns in OhioSource: Google Street View

Dave & Buster's, a nationwide arcade establishment, is set to take a plunge into the betting business, allowing customers to place wagers on arcade games. This decision, aimed at tapping into the burgeoning social betting market, could see the company's five million loyalty members betting through the Dave & Buster’s app on games like Skee-Ball and Dance Dance Revolution. The company, which boasts an attendance of close to 50 million unique visitors per year across approximately 222 venues, is partnering with the gaming provider Lucra, as reported by the Herald Courier.

However, Dave & Buster's foray into this new kind of gambling—estimated by some sources to be an around $6 billion social betting sector—does not come without its challenges, as legislators in multiple states are moving quickly to closely scrutinize, and potentially restrict the move. Illinois State Representative Daniel Didech has already introduced a bill designed to prohibit such practices at family amusement venues. "It is inappropriate for family-friendly arcades to facilitate unregulated gambling on their premises," Didech stated in remarks shared by CNBC. The bill, receiving bipartisan backing, seeks to amend the Illinois Criminal Code, indicating a strong legislative opposition to the initiative.

Details on the betting system being implemented were sparse, but what's clear is that it would not be the traditional casino-style gambling where wagers are made against the house. Instead, the setup is peer-to-peer, described as similar to a "winner takes all" format. Questions remain about age restrictions and how regulations vary by state, however, as laws like Tennessee's impose a 21-year-old age limit for betting, in contrast to the 18-plus rule set by Dave & Buster's. This inconsistency was highlighted in a Knox News report.

Despite the potential regulatory hurdles, Dave & Buster's and Lucra are already ahead in seemingly marketing their venture, with Lucra declaring most bets across its platform averaging approximately $10. Nevertheless, Ohio's gaming control has expressed concerns and intent to "reach out to Dave & Buster’s for additional information," as disclosed by a spokesperson for the Ohio Casino Control Commission in discussions with CNBC. Critics emphasize the necessity for consumer protection measures, particularly when the younger demographic is in consideration. Brett Abarbanel of the International Gaming Institute noted the importance of safeguards, saying there should be "consumer protection measures in place for players," especially considering the target audience includes younger participants.

Compounding the regulatory puzzle is the distinction Lucra makes between its services and traditional gambling, noting peer-to-peer betting is considered skill-based. Thus, they assert that the arrangement is not subject to the typical gambling regulations or taxes. Dave & Buster's views this collaboration with Lucra as a innovative form of entertainment to increase customer engagement and spending, which comes at a time when sports betting has seen marked increases in acceptance and popularity across the country. Both Lucra Sports and Dave & Buster's have declined to comment on the emerging opposition. Meanwhile, industry watchers and regulators alike will undoubtedly keep a close eye on the evolution of this new gambling landscape at the junction of entertainment and expedient bet-making.