'So inappropriate.' Dave & Buster's plans to allow gambling, and an Illinois lawmaker is trying to stop it.

By Weston Blasi

'I think there are some spaces and environments that are just not appropriate for gambling to be pushed on people, especially places where there are lots of children,' says Illinois state Rep. Dan Didech

Dave & Buster's recently announced that it will soon allow people to place peer-to-peer bets with friends on arcade games with real money, and soon after a state official, an antigambling group and a professional bettor said they don't think it's a good idea.

"What they announced is just so inappropriate. In the past few years, gambling has expanded in a lot of ways that I think are good, but in the process become a much larger part of daily life for a lot of people," Illinois state Rep. Dan Didech, who chairs the state's House Gaming Committee, told PlayUSA, which writes about legalized gambling. "I think there are some spaces and environments that are just not appropriate for gambling to be pushed on people, especially places where there are lots of children. The Dave & Buster's in my district is in a mall. It just doesn't make sense for a whole host reasons for them to be getting into this the way they are."

Didech filed the Family Amusement Wagering Prohibition Act (HB5842) bill this week in an effort to thwart the move by Dave and Buster's (PLAY) before it begins. The proposed Illinois bill would disallow wagering on such games at family amusement establishments, and would prohibit advertising that promotes wagering of any kind at those same establishments.

One antigambling advocate also believes this type of wagering is problematic when executed at friendly locations such as an arcade.

"Unlicensed and unregulated gambling is associated with increased gambling problems in adults and youth," Keith Whyte, executive director of the National Council on Problem Gambling, told MarketWatch. "We call on state gambling regulators to examine the legal justifications and gambling-addiction risks of 'social' gambling, especially in settings that cater to youth and families."

Dave & Buster's is a chain of restaurants, and each of its locations has a bar and arcade games. Its policy states: "Persons under the age of 18 or 21 (varies by location) may only enter the premises with a guardian who is at least 25 years of age." D&B is a popular location for kids' birthday parties, but also adult social gatherings like company events and fantasy-sports drafts. Some of its locations have a curfew that "requires guests under the age of 21 to exit the premises by 11 p.m. on Friday and Saturday."

Under the chain's new gambling endeavor, patrons will be able to wager real money against one another through the Dave & Buster's app when playing arcade games, and can earn perks and rewards for playing. The move is being executed in association with the tech brand Lucra Sports, which creates gamification software.

"This new partnership gives our loyalty members real-time, unrivaled gaming experiences, and reinforces our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology," Simon Murray, Dave & Buster's senior vice president of entertainment and attractions, said in a release.

The announcement did not specify which games will be eligible for betting, but popular games at the company's arcades include skee-ball, Connect 4 Hoops, Space Invaders and air hockey.

"We're creating a new form of kind of a digital experience for folks inside of these ecosystems," Lucra Chief Operating Officer Michael Madding said about the move. "We're getting them to engage in a new way and spend more time and money."

Lucra doesn't use the terms "bet" or "wager" to describe its skill games, and instead uses "real-money contests or challenges," Madding said. Lucra said its games are not subject to the same regulations and licensing requirements that a traditional betting brand like DraftKings (DKNG) or FanDuel (FLUT) would need, because they are considered skill-based (like daily fantasy sports) and not chance-based.

Representatives for Dave & Buster's did not respond to MarketWatch's request for comment.

A representative for Lucra said the brand will look to add some limits on bets, but declined to say what those limits would be.

See also: DraftKings posts surge in revenue, hikes full-year sales guidance

While the service would be limited to patrons over 18, the NCPG is concerned that the promotion of this type of betting, or "gamification" as Dave & Buster's puts it, could be problematic.

"Providing 'social' gambling at youth-oriented locations like Dave & Buster's raises significant concerns about youth exposure to and participation in gambling," Whyte added.

Haralabos Voulgaris, a notable professional sports bettor, was among the thousands who reacted to the news on X, formerly Twitter, saying "I can't imagine there was one customer at a Dave & Buster's who thought 'Man imagine how much more fun this would be if we had a D&B app to bet against each other.'"

Shares of Dave & Buster's Entertainment Inc. are up 46.3% over the last 12 months, compared to a 24.8% gain for the S&P 500 over the same period.

See also: How DraftKings figured out NBA player Jontay Porter was betting on games

-Weston Blasi

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05-03-24 1212ET

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