Dave & Buster’s Plan to Incorporate Betting Into Rewards App Draws Pushback

Estimated read time 4 min read

Dave & Buster’s made headlines last week after announcing plans to incorporate peer-to-peer in-app betting for its arcade games. The news resulted in concerns and pushback from state gaming regulators and lawmakers who question whether such wagering violates gambling laws.

A guest at Dave & Buster’s shoots hoops at an arcade in Memphis. Dave & Buster’s is planning to integrate betting into its in-store app, but the decision is being met with pushback. (Image: The Commercial Appeal)

Dave & Buster’s is working with gamification software developer Lucra on incorporating social betting into the arcade operator’s “D&B Rewards” mobile application. The restaurant and entertainment company believes the friendly wagering between family and friends is nothing more than social gaming — the concept of small stakes being wagered on skill-based contests similar to social gaming apps.

Illinois State Rep. Daniel Didech (D-Buffalo Grove) isn’t so sure the social betting claims have merit. Soon after learning about Dave & Buster’s betting plans, the Illinois lawmaker said he’ll file legislation in the Springfield capital to make sure such gambling doesn’t proliferate arcades across the Land of Lincoln.

Regulatory Shortcomings 

Didech voiced concerns that in-app betting at Dave & Buster’s poses a slew of concerns, including underage gambling. Lucra says its gamification products, which are billed as “friendly competition” based on “real-money contests and challenges,” have few safeguards to prevent kids and teens from gambling among themselves.

It is inappropriate for family-friendly arcades to facilitate unregulated gambling on their premises. These businesses simply do not have the ability to oversee gambling activity in a safe and responsible manner,” Didech said in a statement.

Lucra says its real money betting services are intended for adults 18 and up. Didech says the D&B Rewards app can be easily manipulated for a person under that age to gain access to the betting integration.

While casinos require identification for entry and retail and online sportsbooks have a series of age checks in place, Didech says an arcade lacks those safeguards.

“None of those protections are in place at Dave & Buster’s locations. They haven’t even remotely done their due diligence,” Didech told CNBC.

The Ohio Gaming Commission also voiced concerns about arcade betting.

The Commission does have serious concerns about the proposal — including that it appears to violate Ohio law regarding the facilitating of illegal prizes for skill-based amusement machines,” a spokesperson for the regulatory agency told CNBC. “We are reaching out to Dave & Buster’s for additional information.”

Dave & Buster’s has over 200 locations in North America, including more than 160 in the U.S. The company has five locations in Illinois and four in Ohio.

Company Demographic Aging 

Brett Abarbanel, the executive director of the International Gaming Institute at UNLV, told CNBC that Dave & Buster’s intent to bring betting to its arcade app poses concerns.

“There should be consumer protection measures in place for players, particularly when the target audience is skewed toward younger participants,” Abarbanel said.

Dave & Buster’s, however, claims its targeted demographic has changed in recent years. To “grow up,” D&B executives in 2022 initiated a campaign to raise its target demographic to the 21- to 39-year-old.

“Our core position for our Dave & Buster’s brand going forward will bring greater focus to executing adult occasions aged 21 to 39 who are visiting our locations to have a great time with their squad,” Dave & Buster’s CEO Chris Morris said in 2022. “Over the months and years to come, this refined brand positioning will guide our marketing strategy, entertainment innovation pipeline, food and beverage offering, store design and layout, and tech-enabled hospitality model.”

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