Caesar CEO Tom Reig on sports betting, future of ESPN deal

Caesars Entertainment CEO Tom Reig told CNBC on Monday that the work to make sports betting more legitimate is perhaps one of the biggest growth opportunities for the gaming industry in two decades.

“This is a big opportunity. I would have liked it when states outside of Nevada and New Jersey started legalizing riverboat casinos in the 90s,” he said “Closing Bells.”

Reig’s comments came shortly after the Disney-owned ESPN announcement that it struck a deal, which makes Caesars, through its sports betting partner, William Hill, a co-exclusive to the gambling link-out from ESPN Partner. Caesar shares have suffered losses in 2020 as a result of the Coronaras epidemic, closing more than 10% at $ 55.39 on Monday.

“We think there is a lot of money here over time, and we are seeing a lot of interest from non-gaming operators,” Rege said of legitimate sports betting. “This ESPN agreement is the latest proof of that.”

As part of Monday’s multi-year deal, Kaiser Sportsbook by William Hill also becomes a sponsor of ESPN’s fictional sports products. Kaiser is also the exclusive odds provider for ESPN. The two companies have worked together in the past. Last month, for example, ESPN launched a studio at Caesar’s The LinQ Hotel.

Wall Street has also increased interest in sports betting. Penn National Gaming’s investment in Barnstool Sports, and offers possibilities surrounding sports betting, has generated a body of positive notes from analysts in recent weeks. Penn National shares have gained 156.42% this year, closing at a new 52-week high of $ 65.54 on Monday.

DraftKings, which also became a co-exclusive partner with ESPN on the gambling link-out on Monday, has grown more than 170% since it went public after the merger in April. Additionally, DraftKings will now be the exclusive provider of ESPN daily fantasy games.

Reig said while legalizing sports betting is still relatively new in additional states, the gaming industry may find it difficult to evaluate right now. “We haven’t seen an opportunity for growth in the sector in the recent past, so it’s an adjustment for analysts to look at the hyper-growth piece of the maturing business,” he said.

In May 2018, the Supreme Court struck down a federal law that effectively made sports betting illegal in most states. According to the American Gaming Association, there are now 22 states, as well as Washington DC, which have legalized sports betting. Another seven have active legislation to consider it as of 17 August.

With states lacking significant revenue due to the Kovid-19 epidemic, Reig said he thinks sports betting could be perceived by legislators across the US as a way to plug some tax holes. In May, Penn National CEO J. Snowden offered a similar evaluation on CNBC.

“We are in the early stages of legalizing betting,” Reig said on Monday. “I would expect to see states that have post-Kovid era budget issues that can see sports and online as a way to increase tax revenue.”