Having waited three years for the first-of-its-kind occasion, Ted Leonsis has just one regret about this week’s opening of a 20,000-square-foot sportsbook inside Capital One Arena. He wishes it were bigger.

“I think we should be utilizing more of this space,” Leonsis said. “Because when you go into it, it looks and feels like what sports’ future should look and feel like: lots of data, lots of comfortable settings, lots of televisions, lots of ways to learn about gaming.”

For a century, North American professional sports leagues blockaded themselves from gambling, fearful fans would lose trust in the integrity of their games. The barrier between teams and sports wagering has crumbled in recent years, never more viscerally than this week in Washington.

On Wednesday morning, Capital One Arena became the first U.S. professional sports arena with a sportsbook inside its walls. Monumental Sports, the Leonsis-owned local sports empire that owns the Wizards, Mystics, Capitals and other teams, leased the space to sportsbook operator William Hill on a 10-year contract.

It takes up two stories and can be accessed from the street or the arena, with ticketed Wizards fans able to come and go during games without leaving the building, starting with Saturday’s home playoff game against the Philadelphia 76ers. The NHL has not approved entry and exit from the sportsbook during Capitals games, but Monumental and William Hill officials are hopeful the league will by the start of next season.

On Wednesday morning, Leonsis stepped to a podium bearing the logo of William Hill Sportsbook, a video board hanging over his head and a panel of odds and television screens over his left shoulder. He called the sportsbook “the first step in reinvention of the role that arenas play in the community, in the city.” Tom Reeg, the CEO of William Hill’s parent company, Caesars, followed and declared it a “groundbreaking moment.” Five men cut a blue ribbon with five pairs of oversize scissors.

In the three years since the Supreme Court overturned the federal ban on sports betting and opened the door to state-by-state legalization, Leonsis has evangelized sports wagering’s potential to generate revenue and engagement, casting it as a pillar of the data-driven, digital-savvy sports fan experience. Leonsis views the sportsbook as a means to attract younger fans, provide a unique experience and get more use out of Capital One Arena. Leonsis said he has encouraged William Hill to make sports betting comprehensible for beginners, to make clear what odds mean and how to place a bet.

The opening of a sportsbook inside Capital One Arena represents a culmination of Monumental Sports’ embrace of gambling and, in the eyes of some industry experts, a logical endpoint that could be copied as states, teams and leagues continue their full-steam-ahead approach to betting. It also may provide insights into possible downsides: whether it frays trust in the product, diminishes rather than enhances the arena experience for some fans or increases problem gambling.

“Everyone is watching what we want to accomplish as kind of a harbinger of, what can you be putting in your business?” Leonsis said in an interview Monday. “What can you be putting in your arena to benefit the fans, benefit the city, create jobs?”

The past year only intensified Leonsis’s belief in sports betting as central to his sports empire. As leagues shut down and Capital One sat dormant, leagues’ financial reliance on television rights deals became stark. Those rights fees already had been threatened by younger viewers opting out of cable for over-the-top subscriptions.

To replace lost revenue, along with attracting those eyeballs and bringing them to the arena, Leonsis believes younger consumers need to be engaged through new technology. He talked about turning the arena into a “portal” where the experience is both physical and digital. Betting — ancient in practice, still legally novel in most of the country — is at the center of it all.

“The pandemic showed the fragility of owning a building and the necessity for us to try and find new ways to take our core essence — which is competition, data, video — and find new ways to create new businesses and new ways to engage fans,” Leonsis said. “And gaming is huge right now. It’s kind of saved sports short term. Every team, every league, every network has embraced it fully.”

For Leonsis, the future looks like a two-story, 764-person-capacity space plastered with 100 screens, 17 betting windows and a dozen betting kiosks. The entrance is on F Street, where the Greene Turtle used to be. Televisions cover the walls from eye level to ceiling. Betting kiosks line one wall, and on the other side of the first floor is a horseshoe bar with 24 beer taps. A board of odds and point spreads is displayed behind a counter where bets can be placed. A staircase leads to the second-floor lounge and restaurant, for which William Hill hired local chef Nick Stefanelli, known primarily for his Michelin-starred Masseria in Northeast Washington.

“We really think this is going to be a model for these types of experiences inside professional sports arenas,” said Dan Shapiro, William Hill’s vice president of strategy and business development.

How widespread sportsbooks inside arenas and ballparks become remains to be seen. It’s happening in Washington because the law allows for it. Most states with legalized sports betting permit it only on mobile devices or at casinos. “So I actually don’t think that there will be many arenas out there that feature the experience that we can,” said Zach Leonsis, Ted’s son and a Monumental Sports senior vice president.

It’s also possible other states and teams, which have had powerful lobbying sway in the legalization process, will look at the Capital One sportsbook as a model. In January, the Nationals announced plans to open a sportsbook at Nationals Park, in partnership with BetMGM. Arizona recently passed legislation that will allow the Arizona Diamondbacks to partner with an operator for the opening of a sportsbook in downtown Phoenix, across the street from their ballpark.

“This is the shape of things to come,” said University of Nevada Las Vegas gaming professor Joe Bertolone, a former William Hill executive and an industry regulator. “The agreement you see happening around the country between leagues and sports betting, this is just a natural progression.”

By law, Monumental Sports can have no financial interest in bets placed inside the arena. Monumental leases the space to William Hill and receives a portion of the proceeds from food and drink purchased in the sportsbook, but it never touches any of the money wagered.

“There is certainly a division of labor there, which is how it should be,” Zach Leonsis said. “And, you know, we are learning as we go, but we were definitely writing the rules alongside the [NBA]. And I think the league has been very conservative in many respects, very thoughtful in many respects, while also acknowledging that the change is real and here to stay.”

Giving sports fans what they want — or what teams think they want — can prove tricky. Surveys frequently show fans, especially younger fans, want healthier, more creative concessions options, Ted Leonsis said. When they look at receipts, they always find the most popular items are hot dogs and beer.

Ted Leonsis believes in betting’s ability to attract future generations, but the present also includes families and others who do not want or may be turned off by gambling. Monumental Sports executives said the sportsbook’s influence, even with advertisements throughout concourses, can be avoided if desired. Zach Leonsis pointed out the sportsbook takes up 20,000 square feet in a building of more than 1 million square feet.

“If you’re just there to enjoy a game or a concert, it’s something that, you know, you’ll be able to do without it being in your face,” Capital One Arena General Manager Jordan Silberman said.

Last summer, William Hill experimented by opening a “pop-up” sportsbook in the arena’s ticket lobby, where fans could place bets on kiosks. In 10 months — when the arena wasn’t in heavy use and many neighborhood businesses were closed — it generated more than $100 million in handle, Zach Leonsis said.

Ted Leonsis pointed out that Capital One Arena operates 220 to 240 nights per year, usually only for four or five hours. He envisioned a bustling arena on NFL Sundays or busy late mornings for cricket matches and European soccer games. The sportsbook, to Leonsis, enables the arena to transform from usually closed to almost always open, which he argued will lead to increased foot traffic in Chinatown and help businesses and jobs return.

The benefits, advocates say, do not come without costs. “There’s never a free lunch, especially with something as lucrative and addicting as sports betting,” said Keith Whyte, executive director of the National Council on Problem Gambling.

As the District shaped its sports gambling law in 2018, the National Council on Problem Gambling lobbied for and won the inclusion of a provision that the first $200,000 in revenue the city took in would be spent on programs designed to “prevent, treat, and research” gambling addiction through the Department of Behavioral Health.

It is unclear whether or how the money has been spent. Whyte said his staff has contacted the department constantly without success. Messages left with the department by The Washington Post this week were not returned.

“We have not been able to identify that any of that money has been disbursed and certainly not that it’s been spent,” Whyte said. “… It just speaks to the general indifference towards the social costs of this issue.”

Whyte believes a disregard for combating gambling addiction would place “an enormous burden on the league and the team, as well as on William Hill,” he said. “They are now operating and profiting from sports betting in a community that is completely unprotected.”

Any fan who carries a smartphone into the arena has a sportsbook in their pocket, but Whyte saw ways in which the sportsbook could invite an increase in problematic wagering. The two biggest predictors of problem gambling, he said, are proximity and frequency, two enticements provided by a sportsbook inside an arena. Leonsis believes in sports wagering’s ability to attract a younger generation, and according to NCPG studies, young men who bet on sports are the most likely demographic to suffer from gambling addiction. The physical sportsbook also provides tacit endorsement of betting from a prominent civic entity.

“Monumental Sports, they can’t just say it’s William Hill’s problem, and they can’t just say it’s D.C.’s responsibility,” Whyte said. “Monumental Sports, that organization, they’re the ones that are reaping the most revenue. They’re the ones that probably have a fairly large share of the responsibility to make sure that there are net benefits to the community. If you don’t prevent and treat gambling addiction, it’s going to be a net negative.”

Monumental Sports President of Business Operations Jim Van Stone said addressing problem gambling is “near and dear to our heart.” Monumental has partnered with the American Gaming Association, he said, and promoted its responsible gaming program through PSAs that air inside and outside the arena. Van Stone said Monumental chose William Hill in part because of its responsible gaming program.

“That’s probably something we are going to move forward and promote very aggressively,” Van Stone said.

As for Leonsis, he said offering a legalized version of sports gambling was “a public service.”

“I remind people that hundreds of billions of dollars that was being bet illegally — I don’t think that the underground was very, very concerned about people’s financial and mental well-being,” he said. “The AGA and companies like William Hill, they’re very, very committed to it.”

As he spoke, Leonsis stood near the entrance to the sportsbook, the physical embodiment of his bet on sports gambling. He may yet get his wish to make it bigger. The sportsbook has only just opened, and Monumental Sports executives can already see talks about expansion.

“Actually, on the third floor directly above, it’s actually my office,” Van Stone said, laughing. “I’m sure there is a way of building up.”

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