Caesars CEO on sports betting: "We’re seeing a lot of interest from non-gaming operators"

Caesars Entertainment CEO Tom Reeg said on Monday that the further legalization of sports betting is one of the biggest growth opportunities for the gaming industry in perhaps over two decades.

“This is an enormous opportunity. I’d liken it to when states outside of Nevada and New Jersey started to legalize riverboat casinos in the ’90s,” he told CNBC. 

Also on Monday, ESPN had announced it had signed an agreement that makes Caesars, through its sports betting partner, William Hill, a co-exclusive partner for gambling link-outs from ESPN. “We think there’s a lot of money to be made here over time, and we’re seeing a lot of interest from non-gaming operators,” Reeg said of legalized sports betting. “This ESPN agreement being the latest evidence of that.” 

As part of Monday’s multi-year deal, Caesars Sportsbook by William Hill becomes a sponsor of ESPN’s fantasy sports products, and Caesars is also the exclusive odds provider for ESPN. The two companies have worked together in the past. Last month, ESPN debuted a studio at Caesar’s The LINQ Hotel. 

Reeg said the fact that legalization of sports betting in additional states is still relatively new may make the gaming industry difficult to evaluate right now. “We have not seen a growth opportunity in this space in quite some time, so it’s an adjustment for analysts to look at a hyper-growth piece of a business that has been mature,” he said.

With states facing significant revenue shortfalls due to the Covid-19 pandemic, Reeg said he thinks sports betting may be considered by legislatures across the U.S. as a way to plug some tax holes. In May, Penn National CEO Jay Snowden shared a similar position in an interview with CNBC. 

“We’re in the very early stages of legalization of sports betting,” Reeg said Monday. “I’d expect to see states that have budget issues related to the post-Covid era that may look to sports and online as a way to raise tax revenue.”