My best guess: 1)They negotiate free happy hour terms with the bar. The bar is probably happy to provide an hour of free drinks (its a promotional cost) in ex

My best guess: 1)They negotiate free happy hour terms with the bar. The bar is probably happy to provide an hour of free drinks (its a promotional cost) in exchange for getting X number of drinkers in the door. 2) The arbitrage is on what % of the free drinkers will convert to paid drinkers. Notice that only well drinks and Bud is included in the free drink definition. So everything else is an upsell revenue opportunity for the bar. I am assuming the site gets some cut of the paid drinks (high margin product).