Caesars, DraftKings ink online gambling, sports betting pact

draftkings-caesars-online-casino-sports-betting-pactCasino operator Caesars Entertainment has struck an online casino and sports betting partnership with DraftKings that will include Caesars taking an equity stake in DraftKings.

On Monday, Caesars announced the company’s first “multi-state partnership” that will see Caesars offer DraftKings’ “market access for its online gambling products,” subject to local legislation and licensing regimes. The deal calls for DraftKings to promote Caesars as its “official casino resort partner” in the states where the companies collaborate.

DraftKings’ market access is “exclusive to Caesars across certain states in which Caesars operates casino properties,” while Caesars will retain the right to offer its own branded sports betting and online gambling products in the jurisdictions in which the casino operator does business.

Caesars will also take an undisclosed equity stake in DraftKings and Bloomberg reported that Caesars will receive a share of DraftKings’ revenue in states in which both parties operate.

Caesars CEO Mark Frissora, who was supposed to have fled for greener pastures by this point, hailed the deal as a way to create “new sports-themed guest experiences” at its venues, as well as another option for capitalizing on the company’s 55m-strong rewards program database.

DraftKings CEO Jason Robins said partnering with a “world class gaming organization” like Caesars would “expedite our national roll-out process.” Robins said his group looked forward to collaborating with Caesars on “the most innovative and engaging sports and entertainment products and events for our customers.”

Christian Stuart, Caesars’ exec VP for gaming and interactive entertainment, told the Las Vegas Review-Journal that DraftKings picked Caesars “for our scale and the number of markets we are in.” Stuart added that Caesars was impressed with DraftKings’ strong showing in the markets where it had launched sports betting operations. Stuart said DraftKings would hold ‘at least’ five events at Caesars properties in the states in which the two parties collaborate.

Caesars currently operates gaming properties across 14 US states, and thus DraftKings’ new deal will allow it to keep pace with online casino and sports betting rivals GVC Holdings, who previously inked a multi-state online joint venture with casino operator MGM Resorts. Both William Hill and The Stars Group have similar arrangements with casino operator Eldorado Resorts.

Caesars recently released its financial report card for Q4 2018, during which revenue improved 11.3% to $2.12b, primarily due to contributions from its two new Indiana casino properties. However, net income fell 90% to $198m due to Q417’s numbers having been artificially boosted by the Trump tax breaks. Full-year net income totaled $303m, a $671m improvement from FY17’s net loss of $368m.