Caesars Entertainment CEO Tom Reeg instructed CNBC on Monday that the additional legalization of sports activities betting is likely one of the greatest progress alternatives for the gaming business in maybe over 20 years.
“This is a gigantic alternative. I might liken it to when states outdoors of Nevada and New Jersey began to legalize riverboat casinos within the ’90s,” he mentioned “Closing Bell.”
Reeg’s feedback got here shortly after Disney-owned ESPN introduced it had struck an settlement that makes Caesars, by its sports activities betting companion, William Hill, a co-exclusive a companion for playing link-outs from ESPN. Shares of Caesars, which have been damage in 2020 because of the coronavirus pandemic, closed larger by greater than 10% Monday to $55.39 every.
“We expect there’s some huge cash to be made right here over time, and we’re seeing a number of curiosity from non-gaming operators,” Reeg mentioned of legalized sports activities betting. “This ESPN settlement being the most recent proof of that.”
As a part of Monday’s multi-year deal, Caesars Sportsbook by William Hill additionally turns into a sponsor of ESPN’s fantasy sports activities merchandise. Caesars is also the unique odds supplier for ESPN. The 2 firms have labored collectively previously. Final month, for instance, ESPN debuted a studio at Caesar’s The LINQ Lodge.
Wall Avenue has been more and more fascinated by sports activities betting, too. Penn National Gaming’s funding in Barstool Sports activities, and the possibilities it provides round sports activities betting, has led to a slew of positive notes from analysts in latest weeks. Shares of Penn Nationwide are up 156.42% this 12 months, closing at a brand new 52-week excessive of $65.54 apiece Monday.
DraftKings, which additionally on Monday grew to become a co-exclusive partner with ESPN on playing link-outs, have risen greater than 170% since going public by a merger in April. Moreover, DraftKings will now be ESPN’s unique supplier of day by day fantasy sports activities.
Reeg mentioned the truth that legalization of sports activities betting in extra states remains to be comparatively new might make the gaming business troublesome to guage proper now. “We have now not seen a progress alternative on this area in fairly a while, so it is an adjustment for analysts to take a look at a hyper-growth piece of a enterprise that has been mature,” he mentioned.
In Could 2018, the Supreme Court docket struck down a federal law that successfully made sports activities betting unlawful in most states. There at the moment are 22 states, plus Washington D.C., which have legalized sports activities betting, according to the American Gaming Association. One other seven have energetic laws contemplating it, as of Aug. 17.
With states dealing with vital income shortfalls as a result of Covid-19 pandemic, Reeg mentioned he thinks sports activities betting could also be thought of by legislatures throughout the U.S. as a technique to plug some tax holes. In Could, Penn Nationwide CEO Jay Snowden offered a similar assessment on CNBC.
“We’re within the very early levels of legalization of sports activities betting,” Reeg mentioned Monday. “I might count on to see states which have price range points associated to the post-Covid period which will look to sports activities and on-line as a technique to increase tax income.”
