With 65 million loyalty members and the online digital assets of William Hill, Caesars becomes an immediate major competitor to BetMGM, DraftKings and FanDuel in the online betting space across the U.S.getty images
When the nation’s largest casino chain finally found its way into the U.S. sports betting fray, with an app instantly available in most legal states and commercials airing nationally during NBC’s Olympics coverage, it invited a mixed metaphor.
The elephant in the corner of the room is, in fact, the 800-pound gorilla.
Caesars may be new to taking sports bets outside of Nevada and New Jersey, but it hardly is starting from scratch.
The company’s $3.7 billion acquisition of U.K.-based sportsbook operator William Hill gave it a geographic footprint comparable to those of market leaders FanDuel, DraftKings and BetMGM, allowing it to launch its app simultaneously in 10 states and D.C., with William Hill’s registered customers automatically rolling over in each of them.
Layer on the company’s designation as one of three operators to sponsor the NFL and its visibility on ESPN, which uses Caesars-branded odds across its platforms and airs a daily sports betting show from a Caesars-owned Vegas hotel and casino, and it’s clear that sports betting’s latest combatant is poised to make up ground.
“The good news is it’s a launch, but it’s a launch where we’re not starting from zero,” said Chris Holdren, co-president of Caesars Digital. “While it’s a new brand, we had a very strong platform to launch from with existing customers, a great technology platform and incredible market access. So, really, it’s kind of unique in terms of what we’ve seen so far in the industry.”
There are similarities to the other Las Vegas-based casino chains that have made, or plan, high-profile plays in sports betting. Like MGM Resorts and Wynn Resorts, Caesars hopes to benefit from a vast database of casino players in its 65 million-member loyalty program, rewarding them with points they can use at their properties, a perk the legacy daily fantasy companies can’t provide.
MGM entered via a joint venture with London-listed Entain, developing a BetMGM app that started slowly, but has taken off in the past year. Wynn is in the process of revving up its WynnBet app after announcing that it will spin off its interactive division, taking it public through a blank check company led by Vegas Golden Knights owner Bill Foley.
Caesars is the first to bring its brand to sports betting through the acquisition of a sportsbook operator that already had a well-established U.S. infrastructure. With experience operating in both the U.K. and Nevada, William Hill was an early leader in securing access to states as they opened, striking deals with casinos in those that were quickest to legalize.
But access did not always translate to customers. While active in most every legal state, William Hill struggled to resonate as compared to brands that were more familiar to American sports fans. FanDuel and DraftKings account for more than 60% of sports betting handle in most states. As of June, William Hill had only risen above single digits in online market share in one state that reports handle by individual outlets, Iowa, where it is the leader at 34%.
Though strong in Nevada, where a large retail presence made it the market leader, and D.C., where it was the first to take bets at a U.S. sports venue, its app hasn’t caught on across the country.
Who does it best?: The three big U.S. land-based casinos have turned to celebrity endorsers J.B. Smoove (Caesars), Jamie Foxx (BetMGM, below), and Shaquille O’Neal (WynnBet) to promote their push into the digital betting marketplace.
Certainly, the slow grind of the acquisition, which was announced last September but didn’t close until late April, didn’t help. Michigan, Virginia and Tennessee all opened during that span. Competitors spent heavily to acquire and retain customers through the football season, advertising heavily and offering generous sign-up incentives and odds boosts. March Madness, another key acquisition period, came and went.
William Hill knew it was selling, so it had little incentive to continue building the brand in the U.S.
“They had to spend so much money to gain brand awareness initially that I would say it came at the expense of some of the player re-investment and other things people were doing,” Holdren said. “With the switch, we’re not only putting the most recognizable and admired gaming brand as the public face on all these sportsbook and retail locations, but then we don’t have to spend a lot truly on brand awareness. We can spend money on saying we’re here, but then talking about the key attributes and making it much more focused on the great acquisition offers and player re-investment that we’ll be doing.”
Even before it purchased William Hill, Caesars was largely frozen on the sports betting front. The current Caesars is the product of an $8.58 billion merger with Eldorado Resorts that was agreed to in July 2019 but did not close and clear regulator approval until a year later. Eldorado had previously outsourced its sports betting rights to William Hill, complicating matters even more.
In Caesars’ most recent earnings call earlier this month, CEO Tom Reeg laid out the paralysis that hampered the company, and its predecessor, as the sports betting landscape unfolded over the past two years.
“The numbers that you see and that we’ve generated before have been in this kind of lame duck universe,” Reeg said. “The business that we were doing was kind of just incidental, not enough real focus.”
On that same call, Reeg fired a shot still echoing in sports betting circles. Saying that Caesars was “ready to jump in and compete,” Reeg revealed that the company expects to spend more than $1 billion on customer acquisition in the next 2½ years.
The first indications of that have come already in the form of a generous “risk free” first bet of up to $5,000 and the first national ad buy by a sportsbook, with spots across NBC’s final weekend of Olympics coverage, including during the gold medal basketball game and closing ceremonies.
Those will be followed by even more national exposure, as Caesars rolls the campaign into NFL games.
Up until now, sportsbooks have viewed that sort of reach as wasteful, with viewers in New York, California, Texas and Florida, for example, unable to bet legally from their homes. But with more than half the U.S. population expected to be able to bet online by the end of the NFL season, Caesars executives decided it was worth taking the plunge.
“It just feels like the time is right,” said Holdren, who served as CMO at Caesars for nearly three years before being promoted to co-president of digital a year ago. “It’s not the biggest part of our spend, but we’re starting to build that awareness.”
Caesars’ purchase of NFL sponsorship rights is another example of its supersized arrival on the scene. The casino operator was one of three sportsbooks that paid handsomely for official status with the league, which expects to collect nearly $1 billion from the three sponsors across the next five years. The other two were market leaders FanDuel and DraftKings.
Caesars’ entry, coinciding with the NFL’s opening of the category, was fortuitously timed for both. When the NBA, MLB and NHL all did their first sports betting deals with MGM Resorts in 2018, the NFL remained on the sidelines, instead sticking to a casino-only deal with its incumbent in the category, Caesars.
The NFL’s senior vice president of sponsorship management, Tracie Rodburg, was floored each time the league turned to Caesars to host guests or events in Las Vegas. On one trip, Caesars looped in ESPN, celebrity chef Giada De Laurentiis, who has a restaurant at its Cromwell hotel, and singer Marie Osmond, a regular performer at its Flamingo Hotel.
“They even had a flash mob at the pool for us,” said Rodburg, who remembered spying the vast Caesars sportsbook that the league could not use at the time and thinking: What if? “They really make you feel their brand come to life. It’s a great experience for our fans and a great experience for their customers, and that was just as a casino partner.”
Caesars had sponsorship deals in the casino category with more than 10 NFL teams and has begun rolling them into sportsbook deals in legalized states. Last month it unveiled a 20-year, $200 million deal to put its name on the Superdome, which will host the Super Bowl in 2024.
It is all coming together as the NFL expected it would when it aligned with Caesars, first as a casino sponsor and then when it finally opened the sportsbook category.
“They have thoughtfully assembled the pieces over the past few years across sports betting and gaming,” said Chris Halpin, the NFL’s chief strategy and growth officer. “They’ve got a tremendous data base of loyal and engaged consumers and users. They’ve acquired best-in-class sports betting assets and digital capabilities. And they have a premier brand in Caesars. So to bring it together in a unified marketing scheme, in a clear message to fans, and bring all those assets to bear — it is what they’ve been talking about for a number of years and it’s tremendously exciting to see it come together as we start our season.”