Monday’s big sports betting news, believe it or not, was not Oscars betting in New Jersey.
DraftKings and Caesars Entertainment stole the spotlight by announcing a multi-state agreement.
According to the press release, Caesars will offer DraftKings market access for its online gaming products. The deal is exclusive to Caesars across certain states in which the company operates casino properties.
DraftKings, in turn, will promote Caesars Entertainment as its official casino resort partner while Caesars will receive DraftKings equity.
The agreement is subject to the passage of applicable laws and the parties securing gaming licenses in those states.
Mark Frissora, president and CEO of Caesars Entertainment, elaborated on what the deal means for both companies.
“Caesars’ agreement with DraftKings, their first multi-state partnership, brings together the established leaders in gaming, daily fantasy sports and sports betting to provide customers more options.
“This alliance is the latest initiative by Caesars to capitalize on our database, generate a new revenue stream in a growth market and raise our profile in sports, in part by creating new sports-themed guest experiences at our resorts across the country.”
King of NJ sports betting
Since its launch, DraftKings has consistently led the way in mobile sports betting revenue.
In January, online sports betting accounted for nearly 80 percent of the total sports betting revenue.
Meanwhile, the 5,000-square-foot DraftKings Sportsbook at Resorts Atlantic City opened on Nov. 20. It draws standing-room-only crowds for big events, including Super Bowl Sunday.
While neither company is sharing specifics of how the deal will impact the Atlantic City casino market, the deal paves the way for new and exciting opportunities for both DraftKings’ sports betting app and the expanding DraftKings online casino.
A bit more color here: DK, w/ CZR, gets a pretty nice market-access boost. Pre-CZR, DK was at 3 states / ~10% of U.S. population. Post-CZR, DK is at 12 states / ~23% of the U.S. population. FD, for context, is at 15 states / ~36% of the U.S. population.
— Chris Krafcik (@CKrafcik) February 26, 2019
Jason Robins, CEO and co-founder of DraftKings, shared his thoughts on the deal:
“Partnering with such a world class gaming organization will expedite our national roll-out process and give us the opportunity to work alongside one of the largest and most established industry leaders in the world.
“We look forward to collaborating with Caesars Entertainment on creating the most innovative and engaging sports and entertainment products and events for our customers.”
DraftKings + Resorts = a mystery
But now that DraftKings has a multi-state agreement in place with Caesars Entertainment, how will it impact the current partnership with Resorts?
While neither company is talking about parting ways, we have seen it happen in the first year of legal NJ sports betting.
Golden Nugget and its partners are not permitted to offer NBA betting as a result of Tilman Fertitta owning both the Golden Nugget and the NBA’s Houston Rockets.
It has also happened in the NJ online casino market, albeit for different reasons. Betfair (now FanDuel) originally launched under Trump Taj Mahal’s license, but when that casino closed its doors, Betfair found a permanent home with Golden Nugget.
The future at Caesars’ properties in AC
If you look at the three Caesars-owned properties in Atlantic City, sports betting is more of a work in progress.
Caesars Atlantic City does not have its own sportsbook, and likely won’t. But it does offer online sports betting via the Caesars Sportsbook app powered by Scientific Games.
888 Sport also operates under the Caesars license.
Bally’s and Harrah’s both have temporary retail sportsbooks at their respective properties and have been open since the summer. Once Tropicana and Hard Rock Atlantic City open their permanent spaces, they will be the only two AC casinos without complete sportsbooks.
Under the deal, according to the release, Caesars can continue to offer self-branded sports betting and online casino apps in each of these jurisdictions.
In addition, the company will maintain its own primary access in all states according to regulation under the agreement.
But from a Caesars/DraftKings standpoint, this deal opens the door to new revenue streams.
Tie-up of Caesars and DraftKings solves* THE big pain point for DK and also provides Caesars with another way to win in what will be crowded, competitive markets.
*The legislative trend is leaning toward limited skins for online sports betting, which ~moots deals like this. https://t.co/QPtQFZJH4m
— Chris Grove (@OPReport) February 25, 2019
As long as legislatures in the market allow for additional online brands a la New Jersey, DraftKings Sportsbook will have an opening into the wider world of legal US sports betting. And Caesars will have found a way to expand its reach, too.