Partnership leads to the building of a brick-and-mortar dining and gambling venue just an 8-iron to the 18th green at TPC Scottsdale, site of the annual WM Phoenix Open
SCOTTSDALE, Arizona — When Jay Monahan became PGA Tour commissioner in 2017, he did not quite imagine that just five years later he would be at a groundbreaking ceremony for a new DraftKings Sportsbook facility at TPC Scottsdale in Arizona.
But as he knows all too well thanks to the ongoing LIV Golf saga, the sports business landscape can change quickly, and it’s far better to be out in front than trying to catch up from behind.
So, there he was Monday afternoon, ceremonial shovel in hand on an active construction site as a new chapter began to unfold in the PGA Tour’s openness to sports gambling and its partnership with DraftKings.
The first-of-its-kind at a PGA Tour venue, the 12,000-square-foot facility is being built across the street from the TPC Scottsdale Stadium on the site of what was the main entrance each year for the WM Phoenix Open. Expected to open in October 2023, the sportsbook will create approximately 100 to 120 jobs and include a restaurant, bar and indoor/outdoor seating, plus 40 kiosks and seven windows to place bets through DraftKings.
The city of Scottsdale leases the land to the PGA Tour and based on an amended agreement will, according to The Arizona Republic, “receive a portion of gaming revenue from the sportsbook or a minimum annual payment of $170,000 in 2023 and 2024 and $225,000 in 2025. The minimum rent fee will increase by 3% yearly from 2026 until the end of the agreement.”
"It’s a big deal," Monahan says. "Five years ago, our team was actively planning for legalized sports betting across the United States. You go back to 2018 when we put our Integrity Program into place (The stated purpose of which, according to a program manual, is "To maintain integrity and prevent and mitigate betting-related corruption in PGA Tour competitions. ... "). Then DraftKings became our first official daily fantasy partner in 2019 and our first official betting operator last year. As we started to understand what the opportunities were market by market, this was one that we realized we could do something really special."
But why would DraftKings, known for its mobile betting app, want to build a brick-and-mortar structure when its customers normally complete bets with just a few touches on their keypad?
"When you think about going into the venue and everyone’s cheering, betting while you’re watching, it’s just an amazing experience," says Ezra Kucharz, chief business officer, DraftKings Inc. "When you think about a company like ours, you can choose to have an experience where you can sit on your couch with your phone, or you can come to the venue where there’s a lot more people and you can feed off the energy. This is going to be a fun entertainment center where you can watch games, you can have a great meal, you can have a cocktail. It’s going to be a ton of fun."
For the PGA Tour, it’s another connection point, and a lucrative one, with fans.
"I think as we have seen market to market and week to week, when you look at daily fantasy and legalized sports betting, we’re seeing more engagement," Monahan says. "The amount of time that people are spending researching play, researching what's happening in the field of play, researching historical data. There's a level of intelligence that's coming into our sport, a level of understanding that's probably far greater now than it was five years ago."
Yet, due to the aforementioned Integrity Program, and confirmed by Monahan after the groundbreaking ceremony, no PGA Tour player, caddie or employee can have a DraftKings account. And sources indicate that the sportsbook itself will be used as a hospitality venue, rather than being open to the public, during the WM Phoenix Open.
But a bigger year-round audience awaits, which is why the sportsbook at TPC Scottsdale likely won’t be the last one at or near a PGA Tour venue.
"This is the first and we want to make sure it works," Monahan says. "We’ll take the findings here and if other opportunities present themselves, we’ll consider them."
For DraftKings, the project is centered around relationships, but the door truly opened wide to the Scottsdale location with Arizona’s approval of sports betting in April 2021.
"This is a state that allows for it," Kucharz says. "Plus the PGA Tour, the Thunderbirds (the civic group that runs the WM Phoenix Open), and the mayor (of Scottsdale, David Ortega) have been really great partners working with us to make this a great experience. They really got behind the project early and that’s how we’re here."