Shane August is finally on the cusp of opening the first independently owned retail sportsbook in the United States, but he’s got one more hurdle to get over — convincing his new neighbors that a Las Vegas-style sportsbook won’t be the “wild, wild West and alleyways.”
August is aiming to open his Handle 19 Sportsbook in Washington, D.C.’s Capitol Hill neighborhood by Thanksgiving. He said he’s expecting the D.C. Lottery to issue his Class B Gaming license by the end of this month. With that, Handle 19 could start taking bets, making it the second brick-and-mortar sportsbook venue in D.C. to do so. The other is the William Hill sportsbook at Capital One Arena, owned by sports magnate Ted Leonsis, which so far has generated far more legal betting activity than the lottery’s GamBetDC mobile app.
The Washington D.C. Council legalized sports betting in December 2018. It took more than a year for the D.C. Lottery, which is the regulator and has a sports betting app, to go live. The lottery’s GamBetDC launched in May 2020, and the first retail sportsbook at a pro sports venue in the U.S. went live in late July.
So, what’s the holdup for August? Resistance from neighbors, who voiced their concern during a virtual Advisory Neighborhood Commission virtual meeting earlier this month. When Handle 19 applied for a liquor license, it opened a heated discussion among neighbors in the mixed-use neighborhood about whether or not a sportsbook is a good fit. Twenty local residents voiced opposition to Handle 19 during the meeting, according to Capitol Hill Corner. Most are concerned about the “social ills” and “security risks” that a sports book could bring to their neighborhood, which already has bars, restaurants, and liquor stores.
August’s plan: Educate new neighbors on sports betting
Neighbors voiced concern about having a sportsbook in the same neighborhood as elementary schools and day-care centers, as well as how a sportsbook could bring crime to the upscale neighborhood.
“I don’t think it’s going to work because we will not let it happen,” one person was quoted as saying in the Capitol Hill Corner.
The neighborhood is already home to similar businesses, including some that serve food and alcohol, such as the Hawk ‘n Dove bar, which has had an off-again, on-again presence in the neighborhood for decades, and La Lomita Dos, a spinoff of a nearby local Mexican restaurant.
August isn’t flustered by the community pushback.
“We’re going to educate the public,” August told Sports Handle. “What we’ve been doing … we’ve been taking individual calls from members of the public who have attended these meetings. When they think of gambling, they think of the wild, wild, West and alleyways. When we talk to these people and explain what we’re going to do, they kind of come around. It’s just a lack of education or complete misunderstanding about what sports betting really is.”
Rather than force the issue this month, August chose to delay his hearing with the Alcohol Beverage Control Board to Nov. 12, and will use that time to teach residents about sports betting.
Handle 19 will feature sports betting on three floors
But he also said he’ll open Handle 19 even without a liquor license, if necessary. August has been developing plans and partnerships for this venture for two years. The Capitol Hill space wasn’t the original plan — he’d previously been considering a spot in the Adams Morgan neighborhood — but plans change and the latest iteration of Handle 19 is a three-floor, 6,000-square-foot food, beverage, and entertainment venue.
On street level, there will be a full-service sports bar and restaurant, sandwiched between a Las Vegas-style sportsbook on the top floor and an area with odds boards, a cash cage, teller windows, and kiosks on the basement level. There will also be kiosks on the restaurant and sportsbook levels, and initially, patrons will be able to place bets via kiosk or at the teller windows. Down the road, the goal is to have on-site mobile, so bettors can enjoy the high-end sportsbook and take part in in-play wagering from the comfort of their table or club chair.
Virginia businessman Shane August plans sports wagering venture in D.C. – Washington Business Journal https://t.co/dhpQFERSi0
— Brad Sherman (@shermanwealth) June 21, 2019
“I’m on the record since 2019, that we’re coming to market with a Vegas-style sportsbook,” August said. “We do have some small remodeling to complete, and hope to open before Thanksgiving. If we have to open without alcohol in the beginning, we will. We’re doing it because there is a public appetite that is unprecedented.”
Handle 19’s sports betting platform will be run by USBookmaking, which also has sportsbook clients in New Mexico and Colorado. USBookmaking is all about being on the leading edge — its retail sportsbook at the Santa Ana Star in New Mexico was the first in that state to open, and the Sky Ute’s digital platform in Colorado was the first statewide tribal sports betting app to go live anywhere in the U.S.
“We’d love to go in there, as far as D.C. goes, that should be a great market for us,” USBookmaking owner Vic Salerno told Sports Handle. “I think it should be a winner from the start. We’re the service provider and we’re the oddsmaker and we’re making sure they’re not making mistakes. That’s our expertise.”
USBookmaking and Handle 19 have a partnership in which all the employees will work for Handle 19, but Salerno’s group will train the tellers and handle customer service. The D.C. venture will be yet another first.
“D.C. just seemed like a great opportunity,” Salerno said. “I think we have a chance on customer service and really letting the people use their own brand and promote themselves, and that’s where I think we have a little leg up on the big guys.”
Competition in D.C.: William Hill, GamBetDC
So far, the only two wagering options in D.C. are in the retail space at Capital One Arena and via the lottery’s GamBetDC app. The law currently only allows the lottery to have a district-wide app, but the William Hill sportsbook at Capital One Arena will ultimately be able to take advantage of offering its app within a two-block exclusion zone around the arena. Similar situations are available for other pro sports venues around the city.
Competition in D.C. will ultimately be fierce. Handle 19 will be the first sportsbook with a Class B license, which “authorizes physical and mobile sports wagering at businesses located within the District. All wagering, including mobile, offered by a Class B Operator must be conducted within the physical confines of the licensed location.” Essentially, Handle 19 and other Class B licensees can offer retail and mobile sports betting on site, but their digital platform can only be used within their buildings — they cannot take advantage of the exclusion zone offered to pro sports venues.
— Howard Stutz (@howardstutz) October 16, 2020
From a business perspective, that means Class B licensees would be wise to develop a loyal following in their neighborhoods, especially since neighboring Virginia will launch online operators early next year and Maryland voters could legalize sports betting on Nov. 3. August has visions of expanding into both markets, if possible.
But back in D.C., August says the real identity of Handle 19 will develop over time. Unlike less transient cities like Boston or Philadelphia, D.C. is truly a melting pot — of Americans and those from abroad — so August doesn’t want to immediately brand his new venture as a place to watch only D.C. sports teams.
“It’s a diverse place from a cultural perspective and a sporting perspective, so we don’t want to alienate anybody,” August said. “As we operate, the culture within our doors will define itself. We’ll let the public dictate what we’ll have inside. This is for the real bettors, we’re not a corporate group.”
On the sportsbook side, USBookmaking will tailor promotions and special offerings for Handle 19, including in-venue drawings, or refunding money on certain losing bets. Unlike most markets, where online/mobile sports betting is king, so far in Washington Leonsis’ Capital One Arena sportsbook is the leader — the location took in $12.2 million in handle in September as compared to $3.3 million for GamBetDC.
“Just seeing the numbers that William Hill is producing, they are incredible and it’s early in the game,” Salerno said. “For a stand-alone book, and since we’re right there on Pennsylvania Avenue and near Capitol Hill and transit, we feel like we’re in a good spot. And we’ll keep growing, and adding.”