- Caesars Entertainment has announced a multi-year partnership deal for their Caesars Sportsbook brand with Michigan State University Athletics.
- Caesars Sportsbook becomes the ‘Official and Exclusive Sports Betting Partner and iGaming Partner’ of MSU Athletics.
- In addition to the typical promotional opportunities there will be a new Caesars branded premium seating area at Spartan Stadium.
I’m more bearish on the future of sports betting in the United States now that at any time since the Supreme Court struck down PASPA. The market is there, to be sure, but unfortunately the government of most states are going to do everything possible to make sure that this market won’t be served. Actually, a clarification here–the market won’t be served by US state regulated sportsbooks. Most Americans remain better off today betting like they always have–with a quality offshore book or competent ‘local guy’. There are a handful of states that are exceptions–Colorado, Indiana and Iowa are at the top of this list–but even the states that get it right will suffer collateral damage from the states that don’t. Within the next year or two, you’re going to start seeing sportsbooks pulling out of the US market altogether simply because there’s ‘no future’. Americans love to crow about the country’s supposed ‘free enterprise system’ but the reality is that economic freedom in the US has been nose diving for years with no end in sight.
Michigan could go either way–there’s much to like about what is shaping up to be a competitive sports betting ecosystem. There’s also plenty of opportunity for state regulators and/or the legacy gaming powerbase in the state to screw it up. For the time being, there’s at least some reason for optimism which is a quality hard to come by in US sports betting at the moment. Caesars Entertainment offers both sports betting and iGaming in Michigan and the company just got a big promotional boost for their Caesars Sportsbook brand by virtue of a promotional partnership with Michigan State University Athletics.
By now you know the drill–Caesars will get a ton of high profile promotional opportunities and no doubt MSU will get a ton of cash. The press release has the usual gibberish about ‘fan engagement’ and ‘responsible gaming’ to make it look like less of a cash grab for the school. Here’s the press release outline of the deal:
Michigan State University (MSU) Athletics, MSU Sports Properties and Caesars Entertainment Inc. (NASDAQ: CZR) today announced a multi-year partnership to make Caesars Sportsbook the Official and Exclusive Sports Betting Partner and iGaming Partner of MSU Athletics. The partnership combines fan engagement opportunities, a new premium seating area at Spartan Stadium, and an expansion of responsible sports gaming education.
Caesars Sportsbook will gain significant exposure through MSU’s sports properties and access to a wide range of hospitality assets and VIP experiences, which will be available to Caesars Sportsbook players, as part of the wide range of benefits offered through the industry-leading loyalty program, Caesars Rewards.
Assets include broadcast and digital content across MSU athletics, TV-visible signage across basketball, football and hockey, naming entitlement for a new premium seating area inside Spartan Stadium set to debut during the 2022 football season along with an outdoor tailgating area, and access to unique alumni and fan engagement opportunities surrounding varsity sports seasons currently underway. Spartan fans can also soon enjoy special emperor-worthy promotional offers on mobile sports betting, iGaming, and The World Series of Poker (WSOP®) product offerings.
Caesars will also provide scholarship money for MSU students:
In addition to providing a significant financial commitment to MSU, Caesars Sportsbook will provide annual funds to support student-athlete responsible gaming education, student scholarships, as well as internship and professional development opportunities for MSU students pursuing a career in the sports industry.
Eric Hession, Co-President of Caesars Digital, had this quote about the partnership:
“Michigan State has a proud tradition of excellence and partnering with an internationally recognized brand in college athletics is a great opportunity for us. The Spartan fan base and alumni network is passionate and well-established across the country. We look forward to building upon our connection with them while strengthening the legacy we hold in the state of Michigan and advancing scholarship opportunities through this partnership.”
Alan Haller, Michigan State Vice President and Director of Athletics, took cover behind the ‘responsible gaming’ angle after emphasizing the competitive upside of having Caesars back a Brinks truck up to the backdoor of the athletic department:
“The opportunity to partner with Caesars, a leading force in the sports and entertainment industry, will help enhance gameday experiences for Spartan fans and provide significant resources to support the growing needs of each of our varsity programs. We are excited to be on the cutting edge of this innovative opportunity, while recognizing the importance of Caesars’ commitment to responsible sports gaming education both for the student-athletes and the University community as a whole.”
The deal was brokered by Playfly Sports, which has become something of a specialist in putting sportsbooks together with college athletic departments. Here’s Christy Hedgpeth, President of Playfly Sports Properties:
“The rapidly expanding interest around gaming in the college space has pushed us to create strategic opportunities for our college properties that not only provide impactful gaming education resources but also significant opportunities to drive new sources of revenue. Connecting Caesars’ iconic brand to MSU’s passionate community of students, fans and alumni is a perfect fit and another example of how partnerships like this are creating tremendous benefits for all parties involved.”
The press release closes with Caesars’ blurb about the reach of their sportsbook brand–inadvertently underscoring some of the problems with the US market:
Caesars Sportsbook is currently live in 21 states and jurisdictions—15 of which are mobile—and operates the largest number of retail sportsbooks across the country. Eligible sports fans in Michigan can download the app on iOS or Android to take advantage of expansive wagering options, including live in-game betting, daily promotions, special odds boosts, as well as safe and easy ways to deposit and withdraw funds. Caesars Sportsbook integrates Caesars Rewards, where every bet placed rewards the bettor with Tier Credits and Reward Credits that can be used to unlock unbeatable experiences within the Caesars portfolio of properties and partnerships.
Caesars Sportsbook is one of the market leaders–yet they only operate in just 20 states and the District of Columbia. Only 15 of their markets allow their citizens to enjoy mobile betting and given the overwhelming customer preference for mobile betting that’s another big deal. If a state doesn’t allow mobile betting–like the backwards gaming regulators in Mississippi–their citizens are no better off than they were before PASPA. While players in Michigan are able to ‘take advantage of expansive wagering options’ players in most states have to ‘take what they get’ from their state governments–assuming they can get anything at all.
A major problem is the misguided belief that a gaming company is better off serving a state ‘by any means possible’, no matter how bad the regulatory framework or how absurd the tax structure. The mad rush of companies trying to get into New York State despite a 51% tax rate tells you everything. New York *should* be a hugely profitable state for sports betting based on the population alone. The market will languish not only for this reason but for the state’s bizarre method of awarding licenses, linking otherwise competing brands together in one of two cabals.
What *should* have happened in New York State is that the industry collectively should have sent a message that they’ll be interested in coming to the state when the state gets serious about creating an ecosystem where everyone benefits. There have been a couple of instances over the past year where the gaming industry has done a fairly good job ‘sending a message’ to politicians proposing unreasonable terms for operating in their jurisdictions. The relative lack of interest in highly taxed, over-regulated casino projects in Chicago and Richmond was a good sign. Unfortunately, that hasn’t extended to sports betting. When a company like DraftKings gets in bed with lottery run monopolies such as in Oregon and New Hampshire it may bring in some revenue but any financial upside is far less than the collateral damage to the entire industry. Ditto PointsBet in Montana and any of the companies that have agreed to bend over and grab their ankles for the privilege of paying more than half of their revenue in taxes to the state of New York.
Every few days I get some press release that tries to suggest that the potential in the US sports betting market is limitless. Usually, it’s some startup hoping to get a piece of the action and obviously if you’re trying to attract investors you want to put the most positive spin you possibly can on the potential of the market. Unfortunately, until there are some drastic changes in the dynamics of the US market it’s not going to happen. The potential of the market *is* limitless but not under the status quo. Sports betting is a trillion dollar or thereabout worldwide business. The potential economic upside is staggering not only in terms of tax revenue for states, economic development, jobs, investment, tourism–you name it. When sports betting is relegated to just a few politically juiced in cronies (eg: Florida and Arizona) or subjugated to a gimmick game for the lottery, it artificially limits the economic upside. That’s the point, of course, and exactly what the political class tries to do. The sports betting industry knows better–and they should exercise their power of providing a highly specialized service and/or product to shape the regulatory framework in new jurisdictions.
The best case/worst case scenario under the status quo is not good. Best case scenario, the industry stagnates with little in the way of new growth. Worst case scenario, we’re heading for an implosion in the US sports betting industry created by too few states offering a competitive market environment. Even the states that have done a good job–Colorado, for example–will suffer as internationally based firms leave the US due to the ossified and backwards regulatory environment. If the players in the US sports betting industry that ‘know the game’ don’t start doing whatever is necessary to shape the regulatory development of the market there will be very dark days ahead not only for them but for everyone involved.