Caesars, DraftKings ink multi-state deal as online gaming, sports betting heat up
- Caesars Entertainment and DraftKings have partnered on a multi-state agreement, according to a news release. Under the deal, which covers daily fantasy sports (DFS), online gaming and sports betting, Caesars will offer DraftKings market access for online gaming products
- DraftKings will also promote Caesars as its official casino partner in the states where the two companies collaborate. Caesars will continue offering branded sports betting and online casino apps in certain states.
- DraftKings has led the state of New Jersey in mobile sports betting, which accounted for nearly 80% of total sports betting revenue in the state, the company said.
By partnering with DraftKings, Caesars looks to gain a stronger position in sports betting as more states legalize the activity. Since the U.S. Supreme Court struck down the federal ban on sports betting last year, media companies, advertisers and the leagues have anticipated new opportunities for generating revenue, including in venues like casinos. DraftKings and rival FanDuel, which previously scaled back their operations amid speculation that they could violate gambling laws, are expected to continue to ramp up ad spending and partnerships as a response to more comprehensive legalization.
Caesars' key competitor MGM has been active in striking partnerships with the leagues to capitalize on the sports betting opportunity. MGM in November became Major League Baseball's official gaming and entertainment partner. Under the deal, MGM can leverage official MLB stats exclusively and will have its brand advertised across the league's broadcast and digital platform. MGM has previously teamed with the NHL, NBA and WNBA as an official gaming partner as well.
So far, Caesars has partnered with the NFL as the league's first-ever official casino partner, though the deal doesn't include sports betting or daily fantasy sports elements — areas that the NFL has been hesitant to dive into. The expansion of sports betting is expected to drive up viewership of live sports, which has seen a slump recently. This year's Super Bowl, for example, hit a 10-year TV ratings low. As more states legalize sports betting, the value of leagues, teams, sports media and TV rights deals could increase.
However, the future of online gambling was put in limbo recently, as the Department of Justice issued a reversal of an Obama-administration opinion on the Wire Act, which bans bettors from sending gambling data across state lines. A 2011 opinion said that the act applied only to sports gambling. The DOJ opinion could impact states, like New Jersey and Delaware, that have already legalized online gambling.