The new DraftKings Sportsbook at TPC Scottsdale in Arizona is changing the line at the 2023 WM Phoenix Open even though the facility doesn’t open until this fall.
Construction of the 12,000-square-foot upscale sports bar, located across the street from the TPC Stadium Course, is taking place in an empty parking lot that has long served as the tournament’s main entrance. The development has altered where spectators will line up outside TPC Scottsdale this week, including the few thousand who famously gather in the pre-dawn darkness before Saturday’s third round to sprint a half-mile for one of the coveted 3,750 general-admission seats at the 16th hole on the tournament’s busiest day.
The always raucous scene on that stadium-style par-3, which is encircled by stands, grabbed international attention last year when Sam Ryder and Carlos Ortiz each aced the hole, setting off wild celebrations as spectators littered the tee and green with cans and cups of beer and water. The chaotic scenes reinforced the tournament’s reputation as a place where the majority of ticketholders come for the party atmosphere rather than the golf. One change for this year: all beers served on 16 will be poured into commemorative plastic cups to reduce their potential flying capability.
“This is a unique opportunity to collaborate with the PGA Tour. … It’s a premium audience we’re tapping into, and it allows the customer to live and touch our brand in a different way.” – Ezra Kucharz
Adding to the spectacle this year is perhaps the tournament’s strongest field ever, with 18 players ranked in the world top 20, a byproduct of its elevated status as a “designated event” by the PGA Tour and a purse increase from last year’s $8.2 million to $20 million this year.
The slight detour at the main entrance via a green carpeted ramp will give fans a sneak peek of the foundation being laid for what will be the first sportsbook built at a PGA Tour venue. It’s a new tactic for the Boston-based DraftKings, which is also debuting another brick-and-mortar location at Wrigley Field this year.
“Our retail sportsbook strategy with our book in Arizona was to find a high foot-traffic area in a great state for us,” said Ezra Kucharz, the chief business officer of DraftKings, Inc. “This is a unique opportunity to collaborate with the PGA Tour. It’s more about creating that memorable experience for customers. It’s a premium audience we’re tapping into, and it allows the customer to live and touch our brand in a different way. The customer acquisition component is big there, especially when you’re tapping into a premium audience.”
The venue will be open seven days a week, but official hours have not yet been announced. Interior and exterior seating will provide room for almost 400 people, with 3,400 feet of video walls and television screens showing sports events from around the world. While DraftKings remains a mobile-based sports gambling app, there will also be 40 kiosks and seven ticket windows where customers can also place bets.
And if you have a mobile sports gambling app with another company (e.g. FanDuel, Bet/MGM or Caesars, which respectively are the next most-used apps of their kind in Arizona behind DraftKings), you will still be able to wager through those. The DraftKings Sportsbook will, however, be closed to the public during the WM Phoenix Open next year, serving instead as a private hospitality venue.
At the venue’s groundbreaking ceremony this past December, PGA Tour commissioner Jay Monahan was enthused about the latest chapter in a partnership that led to DraftKings being named the official sports betting operator of the tour in September 2021.
“Five years ago, our team was actively planning for legalized sports betting across the United States,” said Monahan. “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.”
“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.” – Jay Monahan
That deal also reflected a recognition of the growing fan engagement via daily fantasy and legalized sports betting, according to Monahan.
“The amount of time that people are spending researching play, researching what’s happening in the field of play, researching historical data,” he said. “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.”
The new facility did require an amendment to an existing 50-year lease agreement, signed in 1985, between TPC Scottsdale and the city of Scottsdale. The latter has an agreement with the Bureau of Reclamation to use the federal land containing both the Stadium Course and Champions Course, which are separated by North Hayden road in north Scottsdale.
The TPC already pays the city 12.5 percent of all golf-related revenue and 2 percent of all food, beverage and golf shop sales. But the amendment change means TPC will also pay the city – sole owner of the Sportsbook site – either an annual minimum of base rent ($170,000 in 2023 and 2024, $225,000 in 2025, and $225,000 plus a 3 percent annual increase for 2026) or the maximum total of gaming income percentage (2 percent of gaming revenues to start and rising to 5 percent in January, 2027) plus food and beverage income percentage (2.5 percent of all food and beverage sales on the Sportsbook property) if that total amount exceeds the base rent. The city will also receive an annual administrative fee.
The PGA Tour will be watching closely when the Sportsbook doors open later this year.
“This is the first, and we want to make sure it works,” Monahan said. “We’ll take the findings here and if other opportunities present themselves, we’ll consider them.”
Where could those be? In addition to Arizona, online or in-person sports betting is currently approved in 33 states, 13 of which host events on the 2022-23 PGA Tour schedule. But that list does not (yet) include Texas, California or Florida, where a combined 17 tournament venues are located.
When the TPC Scottsdale DraftKings Sportsbook does open, it will add another lucrative chapter to the financial impact of the WM Phoenix Open, which according to an economic impact study conducted by Arizona State University, generated an estimated $453.7 million into the state of Arizona’s economy last year.