The NFL is pushing further into the betting world, announcing today that Caesars Entertainment (NASDAQ:CZR) is the league’s first casino sponsor. The league also brought DraftKings (NASDAQ:DKNG) aboard as its official sportsbook partner.
Once hands-off when it came to sports betting, the most popular sports league in the US slowly warmed to the idea following the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA). As sports wagering emerges from the shadows and is increasingly regulated in the US, the NFL sees revenue-generating opportunities and avenues for gaining and retaining fans, particularly in key younger demographics.
In the agreements with Caesars and DraftKings, the NFL teams with one of the most recognizable casino brands in the world and the second-largest online sportsbook operator in the country. The Boston-based daily fantasy sports (DFS) provider not only offers superior brand recognition, it presents the NFL with another way of connecting with millennials and Gen Z.
The pacts between the league and the gaming companies start with the upcoming 2021 NFL season. Similar to other agreements between professional leagues and operators, Caesars and DraftKings get rights to NFL marks and logos, as well as media and data on NFL.com and the league’s mobile app.
Caesars will partner with the League to create content and opportunities for engagement for both its legal online sports betting operations and its expansive retail sportsbook locations across the country,” according to a statement,
Likewise, DraftKings gets access to the league’s official data feed and will be able to present highlights and next-generations statistics to its clients.
Impact for DraftKings, Caesars Stocks
While announcements between leagues and gaming companies are now commonplace, the cache of the NFL is undeniable.
As much is being reflected by DraftKings stock. In Thursday’s after-hours session, the shares are higher by more than six percent following news of the NFL accord. That’s a welcome reaction for investors enduring what’s now a three-week slide in the once-hot gaming equity.
Caesars’ equity reaction is more subdued, with that name trading modestly higher late Thursday. The Harrah’s operator already has extensive NFL exposure, including relationships with seven teams — the Atlanta Falcons, Baltimore Ravens, Carolina Panthers, Indianapolis Colts, Kansas City Chiefs, Las Vegas Raiders, and the New Orleans Saints .
Last month, it was reported that the Mercedes-Benz Superdome in New Orleans — the Saints’ home field — could bear the Caesars name, making it the first NFL stadium to sport a gaming brand.
Right Time for NFL, Gaming Companies to Cozy Up
In the US, football is the most wagered-on sport. It’s estimated that during the 2020 season, 33.2 million Americans placed bets on NFL games, with nearly 18 million doing so at land-based sportsbooks or on regulated and offshore platforms.
For the NFL, a wider embrace of legal sports wagering makes economic sense, as studies prove bettors are more likely to watch contests on television, and TV deals are the league’s biggest revenue source.
There’s the element of geography. With Arizona and Maryland slated to join the live and legal fold prior to the start of the 2021 season, half the NFL’s 32 franchises are located in states where sports betting is permitted. That figure doesn’t account for the possibilities of Louisiana, Ohio, Massachusetts, and Missouri joining the party later this year or in 2022.
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