Morning Buzz

DraftKings to open sportsbook at TPC Scottsdale

By Bill King

DraftKings will open a year-round retail sportsbook at TPC Scottsdale, home of the PGA Tour Waste Management Phoenix Open, as part of a deal with the Tour that will allow the sports betting operator to offer online wagering throughout Arizona, pending the expected signing of a bill passed Monday night. The first-of-its kind structure passed by Arizona lawmakers would grant licenses to operate online sportsbooks to 10 tribal casino operators and 10 pro sports venues, six of which will go to TPC Scottsdale, NASCAR-owned Phoenix Raceway and the state’s four major pro teams: the Cardinals, Suns, D-backs and Coyotes. The remaining four are to be determined. Though Illinois and the District of Columbia have granted licenses to teams, Arizona is the first to convey them control of state-wide online licenses. It also is the first to grant licenses to event operators, such as the PGA Tour and NASCAR.

The deal makes DraftKings the exclusive sports betting operator of the Tour’s annual Phoenix stop. The Tour also will work with DraftKings to promote TPC Scottsdale and the new new sportsbook. DraftKings signed on as the Tour’s official DFS game in '19 and as its first authorized sportsbook operator in July. Though financial terms were not released, sources familiar with market access and sportsbook sponsorship deals pegged its likely value at $45-55M over 10 years, with the Tour receiving guaranteed minimums and revenue sharing.

“We’ve talked before about all these little steps we’ve taken to move (golf betting) forward,” said PGA Tour Senior VP/Media & Gaming Norb Gambuzza. “This for us is a full stride. This is not a step. This is a stride. We are taking a big step forward in doing this deal and committing to building a sportsbook experience at one of our golf courses and having that live and active and promoted during one of our tournaments. It took a lot to get here, but we’re excited about where we are.”

DraftKings views the retail component as a flagship for its brand, planted in a location that is the focus of locals on tournament weekend and a popular tourist destination for much of the year. It gains the same state-wide online access through the Tour as it would from one of the teams, which likely would have come at a higher price tag, based on the volume of games at those venues and the higher betting handles of the NFL, NBA and MLB. While the Tour and DraftKings share optimism about the potential for golf to grow rapidly as a betting product, it lacks an established history as one.

“We had a lot of conversations with different organizations and, I’ve got to be honest with you, this was the right fit for us,” said DraftKings Chief Business Officer Ezra Kucharz. “The energy around the venue is tremendous. Scottsdale is a great community and a tourist destination. We have a great partnership with the PGA Tour and think golf is a great sport to bet on and play fantasy sports on. It was just something that came together.”

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