Dave & Buster’s is about to become the middleman — or middlemen, I guess — to the friendly wager.
People bet against each other all the time. Twenty bucks says I hit the next shot, five says you miss, etc. And, surely, some of that betting has gone down at a Dave & Buster’s already.
Why not make it official then? That seems to be part of the reasoning behind Dave & Buster’s Entertainment Inc.'s plan to roll out a new feature on its app that will allow customers to wager against each other on the various games offered at D&B locations, such as Skee-Ball.
Technology provider Lucra will power the new feature for Dave & Buster's, which owns and operates more than 200 entertainment and dining establishments across North America.
“The new strategic partnership integrates Lucra’s proprietary gamification software into the Dave & Buster’s app, allowing loyalty members to digitally compete with each other, earn rewards, and unlock exclusive perks while competing with friends at Dave & Buster’s – bringing together the sports arena and the arcade for an unparalleled, gamified experience,” a press release said.
When everyone laughs when you suggest going to Dave & Buster’s for the 19th straight Sunday pic.twitter.com/5y8iGCeWHC
— Dave & Buster's (@DaveandBusters) January 22, 2023
Sure, maybe this "gamification" involves people betting against each other. And sure, maybe the word "gaming" is often a stand-in for "gambling."
But whatever you may think, the companies involved are confident what they're doing is "NOT" gambling, at least not in the legal and regulatory sense.
CNBC’s story on the announcement said that “Lucra says its skills-based games are not subject to the same licenses and regulations gambling operators face with games of chance,” and that the company is “careful not to use the term ‘bet’ or ‘wager’ to describe its games.”
Lucra’s software development kit (SDK) “is NOT considered gambling,” the company’s website adds. Instead, “Lucra is legally classified as a skill-based game, which means end users compete against each other based on their abilities rather than predominantly relying on chance.”
Feels a bit familiar
I guess that's that, then?
However, if the legal and regulatory concerns are minimal, the reputational risks and influence on public opinion might be a bit more substantial. Tuesday's announcement got people talking on social media, and not all of that chatter was positive.
I’m reminded a bit of the ongoing bunfight over how pick’em contests versus the house are classified. Operators such as PrizePicks and Underdog are confident they are on sound legal ground offering pick’ems as a fantasy product. Nevertheless, their rivals have begged to differ, and some state regulators have agreed with the competition, forcing the pick’em providers to back down or change their approach in certain jurisdictions.
There has been a lot more debate around what constitutes a game of skill and what is a game of chance, especially when it comes to fantasy sports contests. Still, who’s to say some state lawmaker or regulator doesn’t look at what Dave & Buster’s and Lucra are doing here and take issue with it?
Lucra's website says its recreational games SDK is available in 43 states, which suggests widespread approval but also a few holdouts. Maybe somebody with influence just won't like what they see at Dave & Buster's.
Dave & Buster's to allow customers to bet on arcade games https://t.co/BsLfo92Kcs
— CNBC (@CNBC) April 30, 2024
Dave & Buster's is also a popular brand. So why even invite the possibility of some kind of pushback? As CNBC noted, Dave & Buster's boasts more than five million loyalty members and a stock price that has shot up more than 50% over the past year. Business looks pretty good.
But what Dave & Buster's may want from Lucra and its “gamification software” is what professional sports desired from sports gambling: “engagement.”
Lucra says its “value prop” to its partners includes that it helps “keep customers longer inside your ecosystem.”
For leagues like the NBA and NFL, sports wagering has helped pull people deeper into their ecosystems, with bettors hanging on every bit of news, every draft pick, and every schedule release. Those bettors are indeed some of the most engaged viewers a league has. Their engagement also becomes viewership and attendance that can be used to attract advertising and sponsorship money, as well as bigger TV deals that can be extracted from broadcasters.
The Dave & Buster’s “ecosystem” will look a bit different but the idea is similar. You want people to develop a deeper connection to your business and then those ties translate into money. Instead of somebody going to Dave & Buster’s once every few months, maybe it becomes every month because they’ve just got to try to take their buddy’s cash at some game.
“Ultimately, it could mean people spend more time and money at the venues,” CNBC noted.
Dave & Buster's adding a betting function to its arcade games is just the latest sign society is cooked https://t.co/gvur7vA9tn pic.twitter.com/RNcrtbYnfg
— For The Win (@ForTheWin) April 30, 2024
That money could be spent on more nachos and beer. But what would you call it if someone feels increasingly compelled to risk money, even if it’s just over an arcade game? Lucra, notably, says it offers responsible gaming resources on its website and in its SDK.
“That way, end users can access these resources while they are interacting with your platform,” the company’s FAQ says.
That’s good. It does raise a question, though: why would someone need responsible gaming resources for something that’s not gambling?
While there are answers — even “game of skill” fantasy operators offer problem gambling help — the patience for all things gambling and gambling-adjacent is growing thin in the public square. The spread of legal sports betting, and the embrace by teams and leagues, is a big contributor to that sentiment.
Dave & Buster’s may get the engagement it's looking for, but it may also find other parties engaging as well, and not necessarily the ones they want.
