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Caesars CEO Tom Reeg on way forward for sports activities betting, ESPN deal

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Caesars Entertainment CEO Tom Reeg advised CNBC on Monday that the additional legalization of sports activities betting is without doubt one of the largest development alternatives for the gaming business in maybe over twenty years. 

“This is a gigantic alternative. I would liken it to when states exterior 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, via its sports activities betting associate, William Hill, a co-exclusive a associate for playing link-outs from ESPN. Shares of Caesars, which have been harm in 2020 on account of the coronavirus pandemic, closed increased by greater than 10% Monday to $55.39 every. 

“We predict 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 prior to now. Final month, for instance, ESPN debuted a studio at Caesar’s The LINQ Lodge. 

Wall Road has been more and more all in favour of 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 current weeks. Shares of Penn Nationwide are up 156.42% this yr, 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 via 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 judge proper now. “We now have not seen a development 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 Might 2018, the Supreme Court docket struck down a federal law that successfully made sports activities betting unlawful in most states. There are actually 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 because of the Covid-19 pandemic, Reeg mentioned he thinks sports activities betting could also be thought-about by legislatures throughout the U.S. as a strategy to plug some tax holes. In Might, 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 would anticipate to see states which have finances points associated to the post-Covid period that will look to sports activities and on-line as a strategy to elevate tax income.” 

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