Buffalo Wild Wings is entering the sports gambling arena. The sports bar chain, which has about 1,200 restaurants in all 50 states, said in August that it will look to incorporate gambling into its restaurants wagering now that the Supreme Court has opened the door for states to legalize sports betting.
The Catalyst to Change
In May, the U.S. Supreme Court lifted a federal law that had restricted legal sports betting to primarily Nevada for the last 26 years. Since the court’s ruling, striking down the Professional and Amateur Sports Protection Act, Delaware, Mississippi and New Jersey have begun offering Las Vegas-style sports betting. West Virginia is expected to be up and running by the start of the NFL season, and analysts predict that more than half of the states will have legal sports betting within five years.
“As the largest sports bar in America, we believe Buffalo Wild Wings is uniquely positioned to leverage sports gaming to enhance the restaurant experience for our guests,” a Buffalo Wild Wings spokesperson released in a statement. “We are actively exploring opportunities, including potential partners, as we evaluate the next steps for our brand.”
Founded in 1982, Buffalo Wild Wings transformed the local sports bar into a national chain, with some locations featuring an almost Las Vegas-sportsbook feel with walls of giant TVs tuned in to a variety of games and sporting events.
How Will The Betting Work?
Licensing requirements to offer sports betting vary by state but likely would require Buffalo Wild Wings to partner with a current gaming operator. The company said it wouldn’t elaborate further on the issue for now.
“We’re still waiting for state legislatures and regulators to hash out licensing rules, so it’s unclear how they’ll [Buffalo Wild Wings] have opportunity to participate,” said John Decree, head of North America equity for Union Gaming, a boutique investment bank that focuses on the gaming industry.
Current there are 43 states with some type of legal casino. But even states without casinos could move to allow sports gambling.
Decree said that he thinks it’s likely that Buffalo Wild Wings will partner with an established casino or other sports betting entity, rather than try to get licenses on its own as states move to allow sports wagering.
“It’ll be hard for them to try to get licensed in every state that allows it. There’s a lot of legal costs and time involved,” he said.
Much of the coming boom in sports gaming is expected to take place online, especially on mobile apps, meaning that many customers watching games at a Buffalo Wild Wings will be able to place bets at a variety of sports books in their states.
Decree said it’s likely that some states that allow online wagering will require people to put money on their account in person and using cash, rather than using a credit card.
In that case, Buffalo Wild Wings could reach an agreement with some sports books that would allow people to put money on their account in one of their restaurants.
“That alone can generate a lot of foot traffic,” he said.
A Tough Comeback Ahead
Buffalo Wild Wings, which has locations in all 50 states, will likely need to partner with a company that is already licensed to take bets. The chain has struggled in recent years in its ability to attract younger customers and the rising price of chicken wings.
In June 2017, Buffalo Wild Wings CEO Sally Smith blamed slumping sales on millennials, saying in a letter to shareholders that millennial consumers are more attracted to, among other things, ordering delivery from restaurants and eating quickly. Having fewer consumers in restaurants also hurt alcohol sales, where Buffalo Wild Wings pulls in its highest margins.
The company was bought by Arby’s in November for $2.4 billion. Roark Capital, a private equity firm, owns a majority stake in Arby’s, and Wendy’s owns 18.5 percent.
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