Caesars, DraftKings Tie Up Loose Markets with Latest Partnership
Among the recent business transactions worth a look is the limited partnership announced on Monday between Caesars Entertainment Corportion (CEC) and daily fantasy sports operator DraftKings, which is also taking steps to become a broad-based sports-betting service. The multi-year deal the two firms jointly announced includes “online gaming market access, events and new revenue streams.”
The deal is heavily focused on mobile offerings, as one would expect, and it appears designed (pending of course, on regulators’ approval) to give DraftKings access into states where Caesars has land-based properties and where sports betting is already legalized or will be in the near future. According to the companies’ announcement, “DraftKings will promote Caesars Entertainment as its official casino resort partner in the states where the companies collaborate, and Caesars Entertainment will receive DraftKings equity. Caesars can also continue to offer their own branded sports betting and online casino apps in each of these jurisdictions – and will maintain their own primary access in all states according to regulation under the agreement.”
That’s a win-win deal it seems, while also answering the question of whom Caesars might partner with as the company expands it move into mobile wagering. The announcement makes little reference to any possible impact of last month’s Wire Act opinion reversal by the US Department of Justice and any dampening effect that opinion might have on the providing of mobile-based services; that unpopular opinion is already coming under legal attack from several channels. The deal is described as being “subject to passage of applicable laws and the parties securing applicable gaming licenses.”
The deal will give DraftKings market access in several states where Caesars has properties, and though the states themselves aren’t listed, CEC currently owns and operates casinos in 13 US states. That includes New Jersey, where DraftKings is already licensed. The release notes that DraftKings Sportsbook in New Jersey was the first online book to open there, last August, and since then, DK’s online sports-betting revenues have topped New Jersey’s monthly charts in that category. DraftKings is also licensed in Mississippi — CEC operates three casinos there — and a new rollout featuring a Caesars/DK platform is sure to be among the first products served up under the new partnership.
“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,” said Mark Frissora, President and CEO of Caesars Entertainment. “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.”
“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,” said Jason Robins, CEO and Co-Founder of DraftKings. “We look forward to collaborating with Caesars Entertainment on creating the most innovative and engaging sports and entertainment products and events for our customers.”