There’s Muddy NJ Sports Betting Water Ahead For Caesars-Eldorado Merger

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A merger between Eldorado Resorts and Caesars Entertainment will impact the emerging NJ sports betting and flourishing NJ online gambling sides of the business.

It’s just not yet clear exactly how.

On the sports betting side, both companies have a number of agreements in place that already shape each one’s interests in New Jersey. On the online casino side, however, things are likely a little less complicated.

Caesars sports betting agreements

Caesars struck a deal with Scientific Games in 2018 to power its sports betting business outside Nevada. Scientific Games is now behind Caesars’ Atlantic City retail sportsbooks at Bally’s Atlantic City and Harrah’s Resort Atlantic City.

The company also powers the Caesars Casino & Sports online and mobile NJ sports betting product.

However, Caesars also has agreements with a number of other entities. In fact, before the merger was announced, these deals appeared to be driving its future interests in the sports betting sphere across the US.

Caesars has marketing and promotional deals with the NFL and several pro sports franchises, including the New Jersey Devils. Plus, it also has sports content and sponsorship deals with broadcasters ESPN and Turner Sports.

However, its a Caesars deal with DraftKings Sportsbook that may have the most impact on the post-merger company’s sports betting operations.

The multi-year and multi-state agreement appears to grant DraftKings Sportsbook access to states where Caesars has land-based casinos. In return, it gives Caesars an equity stake in DraftKings.

However, Eldorado Resorts’ own sports betting agreements may ultimately supersede that deal and block that access.

Eldorado sports betting deals

Eldorado acquired 20% of William Hill US in exchange for exclusive market access across Eldorado’s portfolio of land-based casinos in September 2018.

In fact, William Hill opened a permanent (and expansive) retail sportsbook at Eldorado’s Tropicana AC in March 2019. And for its part, William Hill also has a deal with the NHL and the NJ Devils.

However, Eldorado has also entered into a partnership with The Stars Group (TSG). This deal gives TSG the option to own, operate, and brand real-money online sports betting, poker, and casino offerings in states where Eldorado operates.

Of course, The Stars Group has since signed another agreement with Fox Sports. This deal will see the pair launch Fox Bet sports betting products in the fall of 2019.

Therefore, it’s possible that Fox Bet will want to launch in various states under the post-merger business’ licenses, New Jersey included.

What we do know is that Eldorado Resorts shareholders will own 51% of the new company while Caesars Entertainment shareholders hold the other 49%. Plus, the new Caesars will be led by current Eldorado CEO Tom Reeg and Chairman Gary Carano.

Can these sports betting deals co-exist?

On a conference call Monday, Reeg claimed all the different sports betting deals can fit together successfully.

“We bring the William Hill and The Stars Group access partnerships,” said Reeg. “Caesars has a plethora of sports partnerships, including league partnerships, team partnerships, ESPN… and we see them all fitting together.

“We would see William Hill and TSG rolling into access deals across the Caesars portfolio to the extent that they’re not already offered in our portfolio. But we think the opportunity in sports betting in the combined company is as good as there is out there at this point.”

That would presumably mean both William Hill and Fox Bet operating out of the new Caesars’ properties in AC. However, that ignores the DraftKings deal with Caesars.

Plus, it ignores a statement released by William Hill on Monday claiming it enjoys some measure of exclusivity at all pre- and post-merger Eldorado properties.

The statement reads:

“Under the (William Hill-Eldorado) agreement, William Hill gained the right to exclusively operate sportsbooks at all properties owned or managed by Eldorado in the United States and to operate mobile sports betting in states where Eldorado obtains a license. These rights apply to casino properties owned or managed by Eldorado when the strategic partnership was signed and any subsequent acquisitions. Therefore, the rights apply to casinos currently owned or managed by Caesars if Eldorado’s acquisition of Caesars is completed.”

Putting the sports betting puzzle together

The merger requires approval by shareholders and various gambling regulators (not to mention the Federal Trade Commission) before it can close.

An Eldorado press release indicates that will not happen until at least the first half of 2020.

Presumably, that will give the newly formed company time to develop a cohesive sports betting strategy. One that services both previous companies’ separate sports betting agreements across all properties.

In the meantime, there is also the NJ online casino side of the business to deal with. Although, it should enjoy a much smoother transition.

The following online gambling sites operate under Caesars’ internet license:

Plus, the following online gambling sites operate under Tropicana’s NJ license:

TSG, using the BetStars and PokerStars brands, is already in New Jersey operating sports betting, online poker, and casino products under the Resorts Casino license.

Other than the TSG-Eldorado deal, online gambling represents far fewer agreements in place and fewer parties to satisfy than sports betting.

As a result, things will likely remain as they are under the new Caesars banner once the merger is complete.

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Martin Derbyshire

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Martin Derbyshire has more than 10 years of experience reporting on the online poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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