Daily fantasy sports leader DraftKings and global gambling giant Caesars Entertainment Corporation announced a multi-year agreement in which Caesars will allow DraftKings to piggyback on its online gaming licenses. Specifically, this has major implications in the sports betting world, as DraftKings will be able to get into states where Caesars has a brick-and-mortar presence and DraftKings has not previously had a sports betting market.
“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, in a press release. “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.”
The joint press release issued by the two companies states that Caesars will receive an equity stake in DraftKings as part of the deal, though the size of that stake was not revealed.
“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.”
DraftKings, known best for being the internet’s largest daily fantasy sports site, has jumped head first into the sports betting arena since PASPA was overturned by the United States Supreme Court last year. It was the first company to launch a mobile sports betting app in New Jersey and has a physical sportsbook at Resorts AC. Through December, DraftKings and FanDuel were by far the two dominant sportsbooks in New Jersey, accounting for about $16 million of the $20.8 million in revenue in December.
DraftKings also has a sportsbook in Mississippi. With the Caesars deal, it now also has access to the Nevada and Pennsylvania markets.
In the press release, it was stated that DraftKings will hype Caesars as its official casino partner. Caesars is not required to automatically let DraftKings launch its own sportsbook brand wherever Caesars has a property, though. Caesars said it “will maintain their own primary access in all states according to regulation under the agreement,” meaning that will use its own Caesars brand in states where it can only have one sportsbook skin.
Because Pennsylvania regulations only allow one sports betting license per operator, it is unlikely that Caesars will give that slot to DraftKings.