Arcade giant Dave & Busters is taking its games to a new level by offering social betting on its app.
Customers will soon be able to place a $5 friendly bet on a Hot Shots basketball game, a bet on a Skee-Ball competition or on any other arcade game. The betting feature, which is expected to launch in the coming months, will work through the company's app.
Founded in 1982, Dave & Buster's now has more than 222 locations in North America and offers everything from bowling to laser tag, plus virtual reality. The company says it has five million loyalty members and 30 million unique visitors to its locations annually. The company's shares are up more than 50% in the past year.
While a betting boom increases engagement among sports fans, digital gamification could have a similar effect within Dave & Buster's customer base by allowing loyalty members to compete with each other and earn rewards. Ultimately, this could mean people spending more time and money at the locations.
Dave and Buster's use technology from gamification software company Lucra.
A general view of the atmosphere at The SDI Takeover @ Dave & Buster's in Los Angeles on June 23, 2022
Tiffany Rose | Getty Images
“We are excited to partner with Lucra to bring this exciting new gaming platform to our customers,” said Simon Murray, senior vice president of entertainment and attractions at Dave & Buster's. “This new partnership gives our loyalty members real-time, unparalleled gaming experiences and reinforces our commitment to continue improving our customer experience through innovative, cutting-edge technology.”
Founded in 2019 by then-Stanford Graduate School of Business classmates Dylan Robbins and Michael Madding, Lucra is a software platform that allows users to compete for real money in friendly competitions. Robbins and Madding previously worked together at Goldman Sachs.
“Lucra helps our partners drive user adoption, increase retention and engagement, and add new revenue streams to their businesses,” said Robbins, CEO of Lucra.
Robbins and Madding saw the incredible growth of legal sports betting, but sought to capitalize on the recreational betting taking place among peers. The company has raised approximately $14 million from investors including billionaire investor Marc Lasry, former and current professional athletes John Isner and Julie and Zach Ertz, along with the Raptor Group and SeventySix Capital.
“We are creating a new form of digital experience for people within these ecosystems,” said Madding, Lucra's Chief Operating Officer. “We get them to engage in a new way and spend more time and money,” he added.
Lucra says its skill-based games are not subject to the same licenses and regulations that gambling companies face with gambling. Lucra is careful not to use the term “bet” or “wager” to describe its games.
“We use real money competitions or challenges,” Madding said.
Lucra's matches are only available to players aged 18 and over. The competitions are available in 44 states.
According to gaming research firm Eilers & Krejcik, the social betting category is a $6 billion industry. Several companies such as Fliff and ReBet have emerged, hoping to emulate the success of the gambling industry and capture a younger market.
Lucra recently signed a deal with Dupr, the pickleball rating system, and TennisOne, a tennis app, to allow players to compete against each other for real money. Lucra's app has been downloaded 150,000 times, has facilitated more than a million unique matches on the platform and has collected more than $20 million in revenue, according to the company.
“Whether you play pickleball with your friends or golf on the weekend, we help amplify that and digitize that experience with our partners,” Robbins said.