When it comes right down to it, Shane August really just wants the rush he used to get on the football field. A former college quarterback at Norfolk State University, August embraced the thrill of the game. He might have had a shot at playing the pros, but a workout with a pro team “didn’t go my way.” Since then, August has built a successful resume, working in and owning businesses in the financial and health-care sectors.
But when it started looking like sports betting would be legal across the U.S., well, that was an opportunity August couldn’t resist.
“As a former athlete, since I don’t play ball anymore, from a feeling or emotional perspective, to replicate that feeling on the gridiron, the closest thing is to bet on sports,” he said. “Just being emotionally tied to the game, when you can’t step into the shoulder pads or lace up those sneakers anymore, this is the closest. When you have money on the game, you are going to be connected to the game. Just the feel, the appreciation of the sport and the feeling that it gives you … it brings back the emotions from when I played.”
Legal sports betting a case of good timing
August’s love of sports is palpable, and his enthusiasm is contagious, even through the phone lines. But he’s also a good businessman — he created and built a home-health-care company that he sold in late 2017 besides putting in a few years in the financial services industry. The timing of the sale was serendipitous — just six months later, the Supreme Court struck down the Professional and Amateur Sports Protection Act, paving the way for legal sports betting to become a states’ rights issue.
Before the decision, August did some research and decided that his next venture would be into sports betting. He’s passionate about sports and passionate about business, so sports betting would be the perfect union.
He’d hoped to get a foothold in New Jersey, or even West Virginia, among the first two states to go live with legal sports betting in 2018. But he felt like doors “were getting slammed in our faces” in New Jersey and couldn’t seem to get any traction in West Virginia. Maybe those “nos” were just setting the stage for where August finally did find opportunity: Washington, D.C.
The nation’s capital legalized sports betting about a year ago, and is now in the application process. D.C. is currently the only jurisdiction in which an individual would stand a chance at opening a sportsbook. The application fees — some upward of $1 million — and other costs make it virtually impossible in places like Pennsylvania or Illinois. In Washington, August can apply for a Class B license, which costs $100,000.
The new law allows for sportsbooks in major professional arenas and bars and restaurants around the city. Mobile sports betting will be limited to a lottery product.
Capital One Arena in Washington, D.C., is home to the NBA’s Wizards, the NHL’s Capitals—and, soon, a sports-betting facility that would be the first of its kind in a major U.S. sports arena https://t.co/mWVG4ZOail
— WSJ Business News (@WSJbusiness) October 3, 2019
Handle 19 will ‘pay homage’ to Vegas books
August’s plan is to open Handle 19, a Las Vegas-style sportsbook in the Adams Morgan neighborhood of Washington, D.C. August’s vision is to “pay homage” to Las Vegas because he believes “they set the landscape, they are successful, we don’t have to reinvent the wheel, we just have to move it to Washington.”
August will do just that with a new restaurant from partner Ben Sislen, who already owns the Crown and Crow bar in Washington. The two had never met, but Sislen saw August on the cover of the Washington Business Journal at just the right time.
“I was sort of exploring the sportsbook and gambling thing, but the people I was talking with were hitting the pause button,” Sislen said. “I called Shane and Shane was offering a whole lot of knowledge. He had a huge wealth of knowledge of what was going on, and an aggressive viewpoint of what he wants to accomplish. It’s a long process, and he doesn’t want to lose the forward momentum. He’s a great partner.”
August was a fixture at the D.C. Council hearings leading up to legalization. He testified at several hearings and kept his fingers on the pulse of the legalization process. Once the D.C. Council legalized sports betting, August set about finding not only a food-and-beverage partner, but also a sports betting partner. While August will own and operate his sportsbook, he knows what he doesn’t know — he admits he lacks the expertise to run a successful sportsbook.
Enter Newgioco, an established Italian bookmaking company that offers clients a platform and a partnership, and is slowly making inroads into the U.S. market. The company debuted on the NASDAQ in December.
“Basically what we’re doing in terms of the Shane scenario is we’re providing the product, technology, and backing that up with know-how,” said Newgioco CEO Mike Ciavarella. “Anybody can write a software, but having a developer who can understand what a sports bet looks like on both sides is very unique. You need to know what they want. If you don’t know what they want, your business is not going to expand.”
Newgioco will provide sports betting platform
For August, Newgioco will provide what it calls “land-based software” and on-site mobile. Sports betting will take place via kiosks rather than teller windows, though both August and Ciavarella also imagine customers sitting at their tables placing in-game or other wagers via mobile device while enjoying their meals or without having to leave a good conversation. It’s a model that Ciavarella says is prevalent in Europe — and one he believes will be the next generation in the United States.
“Shane is the perfect fit, he’s very motivated, he’s passionate about sports, he’s got a sports background, and he understands from a business perspective what he wants to be able to provide to his customers,” Ciavarella said.
“We want partners. For example, DraftKings comes in and they own the business, so they would for all intents and purposes be leasing space from you. But think about it from the Shane August perspective. If the customer walks in and has a DraftKings account, they walk in and they are a DraftKings client, not a Shane August customer. We are backwards … it will be his business, we’re just providing him the know-how. Shane is the license, he is the bet taker, but we manage the risk.”
Newgioco has been slowly moving into the U.S. market and has made several deals, but August’s Handle 19 will be Newgioco’s first sportsbook in the U.S., and for both sides, deciding to partner was something of a slam dunk.
“I’m thankful for them stepping up and I’m really excited about how far we can go with this partnership,” August said. “They want to grow, we want to grow. It’s a revenue share and it’s a competitive revenue share. Newgioco wasn’t the first people we talked to, but they were the first that made us a competitive offer. … They don’t just want to come in and take over, they want to come in and show us how to run the business.”
Application process underway
The D.C. Office of the Chief Financial Officer opened the sports betting application process in early December, and August, along with consultant Kevin Slicker, is pulling together everything needed for the massive undertaking. The goal is to apply — and get approval — as quickly as possible. As with any sportsbook, determining the best time to launch is critical. For August, as a small businessman, maybe even more so. For example, a March Madness or NBA playoffs launch, both of which are high sports betting periods, is preferable to a down time, like May or the dog days of July or August.
Whatever the decision, and whenever Handle 19 takes it first sports bet, August will make history. As sports betting proliferates, it’s been major corporations — think DraftKings, FanDuel, William Hill, Penn National — that have brought sports betting to the likes of New Jersey or Pennsylvania or Indiana. To date, no other individual businessperson has made a go of it.
“It’s funny, everybody seems to like him, he said what he wanted to do and he went for it,” said Slicker, the owner of GP Gaming Consultants. “He’s knowledgeable, determined, very intelligent. It’s kind of a big deal, not one single, regular person has just opened a sportsbook. A lot of people talk about it.”
But August is putting his money where his mouth is.