Caesars Entertainment continued its multi-pronged efforts to increase its sports betting presence, announcing a deal Monday with daily fantasy sports provider DraftKings that will include market access for online gaming products, such as mobile sports wagering.
Financial terms were not disclosed, and Caesars will receive an equity stake in Boston-based DraftKings.
Under the deal, Caesars will offer DraftKings market access for the company’s online gaming products across the 13 states in where Caesars operates nearly 40 casino properties. DraftKings’ market access will be exclusive to Caesars.
The agreement allows DraftKings to offer mobile sports betting and other online gambling activities, including poker, other table games and slots, if the states enact laws to allows the activity.
DraftKings will have to be licensed in Nevada under state gaming regulations if it wants to offer mobile sports wagering. The company exited the state in 2015 when the Gaming Control Board decided daily fantasy sports was covered under the state’s sports betting laws and operators of the product would have to apply for a sports pool license.
Last August, DraftKings launched DraftKings sportsbook, an online sports betting operation in New Jersey in partnership Resorts Atlantic City. According to New Jersey gaming regulators, the DraftKings has led the state in mobile sports revenue every month. In January, mobile sports wagering accounted for 80 percent of all sports wagers in the state.
DraftKings has a similar deal in place in New York with the del Lago Resort and Casino, but sports betting has yet to become active in the state.
Last year, DraftKings hired long-time Las Vegas sportsbook director Johnny Avello to oversee the company’s sportsbook operations.
DraftKings CEO Jason Robins said in a statement the partnership with Caesars “will expedite our national roll-out process.” Robins added that the long-term plan is to collaborate with Caesars, “on creating the most innovative and engaging sports and entertainment products and events for our customers.”
Las Vegas-based Caesars has actively sought various betting and partnership deals since Supreme Court paved the way for states to legalize and regulate sports betting. Caesars locked in a multi-year sponsorship in January, various Caesars-owned properties have signed marketing arrangements with NFL teams, and the company has corporate deals with NBA and NHL franchises.
Earlier this month, Caesars and sports broadcaster Turner Sports announced plans to create gaming-themed content, including the development of a studio branded by Bleacher Report inside the sportsbook at Caesars Palace in Las Vegas.
Caesars CEO Mark Frissora said a multi-state partnership with DraftKings will create more options for customers.
“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,” Frissora said.
DraftKings will promote Caesars Entertainment as its official casino resort partner in the states where the companies collaborate. Caesars can also continue to offer its own branded sports betting and online casino apps in each of the jurisdictions.
Seven states have joined Nevada in legalizing sports betting since the Supreme Court tossed the Professional and Amateur Sports Protection Act last May. More than a dozen state are considering legislation this year.
Eilers & Krejcik Gaming has estimated the market could reach $6.5 billion in sports betting revenue by 2023 as more states legalize the activity.
Caesars is the third casino company to acquire a stake in a sportsbook operator. In August Boyd Gaming acquired a 4 percent stake in FanDuel and Eldorado Resorts acquired 20 percent in William Hill U.S.
In July, MGM Resorts International and UK-based GVC Holdings created 50-50 sports wagering joint venture.
The Caesars-DraftKings deal comes at the same time that corporate raider Carl Icahn and other major investors in the Caesars are seeking to have the company put itself up for sale. Icahn disclosed a 9.8 percent stake in Caesars last week and is seeking representation on the company’s board. On Friday, another top investor in Caesars, hedge fund Canyon Partners LLC, also called on the company to be sold.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
