Posted on Wed, Jan 16, 2019

NFL going its own way on sports betting
Posted by
Posted on Wed, Jan 16, 2019

After the U.S. Supreme Court struck down the federal ban on sports betting last May, most of the major U.S. pro sports leagues took quick action.

In August, the NBA announced MGM as its first official casino partner. In October, the NHL followed suit with MGM. By November, Major League Baseball announced its own deal with MGM.

But the NFL took until January, and went with a different casino: Caesars.

It is yet another example of the NFL standing apart from the NBA, NHL, and MLB on legalized sports betting. (Recall that the NFL also stayed away from supporting the “integrity fees” that the NBA and MLB have argued for.)

On Thursday, the NFL announced Caesars Entertainment (CZR) as its “first casino sponsor.” It is a three-year deal that is reportedly worth $30 million per year.

The sponsorship begins right away with the 2019 NFL Playoffs, and involves Caesars, “providing unique experiences for NFL fans by using its casino properties, celebrity chefs, premier music artists, and a wide range of entertainment elements.” Caesars also gets to “use NFL trademarks in the United States and United Kingdom to promote Caesars casino properties and activate at key NFL events including the Super Bowl and NFL Draft.”

In the wake of the SCOTUS ruling in May, which allows states to legalize sports betting in their own state, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, and Rhode Island have all passed legalized sports betting. Caesars has since opened a physical sportsbook in Mississippi and launched a sports betting app in New Jersey. It will also open a physical sportsbook at its Harrah’s Philadelphia casino.

But the NFL specifies in its announcement that the Caesars deal is “for the Casino category only” and does not include sports betting or daily fantasy sports. (The leagues that made deals with MGM did not include such language in their announcements.)

In other words, this is purely a marketing play. Caesars is paying $30 million to use NFL logos in advertising and call itself the NFL’s first casino partner. In that regard, it looks a lot like the NBA’s deal with MGM. As Yahoo Finance wrote at the time, the NBA holds all the cards in that deal.

And yet there’s a much bigger story here with Caesars and the NFL: The league that for so long wanted nothing to do with any whiff of gambling is now cautiously dipping its toe into that pool.

The NFL’s choice of Caesars over MGM should not come as a surprise to those who have been paying attention.

In November, Caesars announced it is the first “founding partner” of the massive $2 billion stadium currently under construction in Las Vegas for the Oakland Raiders, set for completion in 2020.

The Caesars deal with the stadium involves a Caesars-branded entrance and digital signage inside the stadium. That sounds a lot like a naming rights sponsorship (Caesars Stadium?), but the Caesars announcement in November did not mention naming rights. (It also did not rule that out.)

There is high anticipation over what company will buy naming rights to the new stadium and how much the rights could fetch. With Caesars already on board as a founding sponsor, it’s difficult to imagine any rival casino company buying the naming rights. (There’s additional irony to the NFL and the Raiders teaming up with Caesars: Las Vegas Sands CEO Sheldon Adelson initially committed $650 million to the stadium project, but backed out in January 2017.)

Add the Caesars NFL sponsorship to the Caesars stadium sponsorship, and a more profound business play starts to take shape: Caesars is wisely paying to be in at the ground floor as the gambling company closest to the NFL, just before the NFL finally stops digging its heels and goes big on legal gambling.

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