Daily fantasy sports kingpin DraftKings continued its evolution into a full-fledged sportsbook operator on Monday, inking a multiyear deal with Caesars Entertainment to facilitate entrance to states where USA sports betting is legalized.
USA Sports Betting: DraftKings Goes All-In on Legalization
Last May, the United States Supreme Court ruled to repeal a federal ban on sports betting outside of Nevada, thus allowing individual states to legalize and regulate the industry as they see fit.
To date, six states have done just that – Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, and Rhode Island – while a tribal casino in New Mexico has also begun accepting legal wagers. Dozens of bills seeking to do the same are currently circulating within several state legislatures.
Upon launching the first online sportsbook in New Jersey last August, DraftKings immediately staked its claim as the Garden State’s undisputed market leader by leading the mobile wagering revenue count in every month since.
DraftKings also operates brick and mortar sportsbooks in Atlantic City via partnership with Resorts Casino, and in Mississippi at the Scarlet Pearl Resort.
But thanks to its newfound union with Caesars Entertainment – which maintains casino properties in 13 states across the country – DraftKings looks to be gearing up for a major multistate expansion.
In a press release announcing the deal, Jason Robins – cofounder and chief executive officer of DraftKings – alluded to the company’s nationwide ambitions:
“Partnering with such a world class gaming organization will expedite our national roll-out process and give us the opportunity to work alongside one 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.”
Under the successful regulatory model pioneered in New Jersey, states that legalize sports betting typically allow online operators access only when they operate under a licensed land-based gaming operator. Among the states where Caesars already has a presence and DraftKings does not, Indiana and Illinois are expected to authorize sports betting in the imminent future, while Nevada and Pennsylvania have already done so.
USA Sports Betting: Caesars Scores Equity Stake in DraftKings
As part of the deal, Caesars Entertainment assumes an undisclosed share of equity in DraftKings, a company which was reported to be in search of funding at a $1.5 billion valuation as of last July.
Additionally, DraftKings will provide promotional assistance by positioning Caesars Entertainment as its official casino resort partner in state markets where the companies do business together.
In the press release, Mark Frissora – who serves as president and chief executive officer for Caesars Entertainment – framed the deal as a union of two established gaming industry players:
“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.”
Per reporting by Bloomberg, across its affiliated Caesars, Harrah’s, and Horseshoe casino brands – which comprise 26 properties in 13 states – Caesars Entertainment has developed a database holding the names of more than 55 million gaming consumers.
In exchange for access to that lucrative customer database, DraftKings provides Caesars Entertainment with the online / mobile operator needed to capitalize on emerging statewide USA sports betting markets.