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January 18, 2024

XL Center sports gambling lounge on pace for six-figure deficit in first year

Greg Bordonaro | Hartford Business Journal The new sports betting facility at the XL Center in downtown Hartford.
By Michael Puffer

A long-awaited sports betting lounge that opened on the western edge of the XL Center in downtown Hartford could end the fiscal year in June with a deficit as high as $750,000.

The 5,000-square-foot sports bar and betting venue off Ann Uccello Street, part of a $15 million package of upgrades to the XL Center, opened its doors Sept. 9.

It has since run a $284,100 deficit through December, which, according to Capital Region Development Authority Chief Financial Officer Joseph Geremia, puts it on course for a $600,000 to $750,000 deficit by the close of the fiscal year.

Geremia delivered his forecast during a Thursday afternoon board meeting of the CRDA, an economic development agency that, among other tasks, has oversight over the city’s sports and entertainment arena.

The XL Center itself already runs an average annual deficit of $2 million, a cost that officials argue is necessary to keep an entertainment venue essential to the vibrancy of the Capital City.

The Connecticut Lottery Corp. predicted CRDA would be able to “offset” anticipated losses from the sports bar through betting receipts, “but we haven’t seen that volume come through here,” Geremia said.

So far, the sports book has generated $18,000 in net profits that have been turned over to the CRDA, Geremia said.

Speaking after Thursday’s meeting, CRDA Executive Director Michael Freimuth said the sports book had been challenged by a change in gambling vendor, which caused a lull in activity. Marketing for the sports betting lounge has not yet launched in force, he said.

Freimuth said the CRDA had anticipated a loss of about $400,000 in the first year, as the sports bar and betting lounge gains attention.

“It’s a new startup, really,” Freimuth said. “It takes a while to get established.”

Freimuth noted the sports bar and lounge has value beyond receipts. Officials have long planned to add an amenity that opens up the western edge of the XL Center to the street, and the bar/lounge is an attractive option when shows and games are in town.

“During game days, you can’t get into the sports book,” Freimuth said. “It’s jammed to capacity. The problem is, Tuesday after 3 p.m., when traffic is nonexistent. You have to carry this facility on a seven-day, 12-hour basis.”

Freimuth said CRDA is planning an overhaul of the food service in the sports lounge, and contemplating other operating changes, including hours of operation.

Separately, CRDA is working to secure $100 million for a large-scale renovation project to the larger XL Center. State lawmakers have signed off on $80 million. The CRDA has a tentative agreement to give venue manager Oak View Group a long-term contract to run events – and reap profits – in return for contributing $20 million toward the renovation.

Under the agreement, OVG would cover any annual operating loss. OVG officials have expressed confidence they’ll be able to dramatically increase the number of performances at the XL following renovations. That would drive traffic to the new sports betting lounge. 

Freimuth said bids for the large-scale XL renovation are due near the end of the month. That will show if the project is viable within the projected $100 million budget. If it is, a deal with OVG can be finalized; if not, CRDA has “to go back to the drawing board a little bit,” he said.

“We will get some real idea of how this budget holds or doesn't hold by the end of the month,” Freimuth told the CRDA board Thursday. 
 

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