Dave & Buster's to allow customers to bet on arcade games

Arcade giant Dave & Buster's is taking its games to a new level by offering social wagering on its app.

Customers can soon make a friendly $5 wager on a Hot Shots basketball game, a bet on a Skee-Ball competition or on another arcade game. The betting function, expected to launch in the next few months, will work through the company's app.

Dave & Buster's, started in 1982, now has more than 222 venues in North America, offering 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 each year. The company's stock is up more than 50% over the past year.

As a boom in betting 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 one another and earn rewards. Ultimately, it could mean people spend more time and money at the venues.

Dave and Buster's is using technology by gamification software company Lucra.

A general view of the atmosphere during The SDI Takeover @ Dave & Buster's in Los Angeles on June 23, 2022Tiffany Rose | Getty Images

“We're thrilled to work 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, unrivaled gaming experiences, and reinforces our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology.”

Lucra and Dave & Buster's said there will be a limit placed on the size of bets it will allow, but that they're not publicly disclosing that threshold just yet. Lucra said across its history the average bet size has been $10.

Lucra, created in 2019 by then-Stanford Graduate School of Business classmates Dylan Robbins and Michael Madding, is a software platform that allows users to compete for real money on 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 monetization streams to their business,” said Robbins, Lucra's CEO.

Robbins and Madding saw the incredible growth of legal sports betting, but sought to capitalize on the recreational wagers taking place between peers. The company has raised about $14 million with investors that include 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're creating a new form of kind of a digital experience for folks inside of these ecosystems,” said Madding, Lucra's chief operating officer. “We're getting them to engage in a new way and spend more time and money,” he added.

Lucra says its skills-based games are not subject to the same licenses and regulations gambling operators face with games of chance. Lucra is careful not to use the term “bet” or “wager” to describe its games.

“We use real-money contests or challenges,” Madding said.

Lucra's contests are only available to players age 18 and older. The contests are available in 44 states.

The social betting category is a $6 billion industry, according to gaming research firm Eilers & Krejcik. Several companies such as Fliff and ReBet have emerged, hoping to mimic the success of the gambling industry and capture a younger market.

Lucra recently signed a deal with Dupr, the pickleball ratings system, and TennisOne, a tennis app, to allow players to compete against one another for real money. Lucra's app has been downloaded 150,000 times, facilitated more than one million unique contests on the platform and collected more than $20 million of handle, according to the company.

“Whether you're playing pickleball with your friends or playing golf on the weekend, we help to amplify that and digitize that experience with our partners,” said Robbins.