Caesars Entertainment CEO Tom Reeg told CNBC 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 a huge opportunity. I would compare it to when states outside of Nevada and New Jersey began legalizing riverboat casinos in the ’90s,” he said, “Closing Bell.”
Reeg’s comments came shortly after Disney-owned ESPN announced it had reached an agreement making Caesars through its sports betting partner, William Hill, a co-exclusive partner for ESPN̵
“We think there is going to be a lot of money here over time and we are seeing a lot of interest from non-gaming operators,” Reeg said of legalized sports betting. “This ESPN agreement is the latest proof of that.”
As part of Monday’s multi-year deal, Caesars Sportsbook by William Hill will also sponsor ESPN’s fantasy sports products. Caesars is also the exclusive betting provider for ESPN. The two companies have worked together in the past. Last month, for example, ESPN debuted a study at Caesar’s The LINQ Hotel.
Wall Street has also been increasingly interested in sports betting. Penn National Gaming’s investment in Barstool Sports and the opportunities it offers around sports betting have led to a number of positive notes from analysts in recent weeks. Shares of Penn National have risen 156.42% this year and are closing at a new 52-week high of $ 65.54 per share. Monday.
DraftKings, which also became a co-exclusive partner with ESPN on Monday on link-outs, has risen more than 170% since its announcement through a merger in April. In addition, DraftKings will now be ESPN’s exclusive provider of daily fantasy sports.
Reeg said the fact that the 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 for some time, so it is an adjustment for analysts to look at a hypergrowth in a company that has been mature,” he said.
In May 2018, the Supreme Court repealed a federal law that effectively made sports betting illegal in most states. There are now 22 states plus Washington DC that have legalized sports betting, according to the American Gaming Association. Another seven have active legislation considering it per. August 17.
As states face significant revenue deficits due to the Covid-19 pandemic, Reeg said he believes sports betting can be considered by lawmakers across the United States as a way to plug some tax loopholes. In May, Penn National CEO Jay Snowden offered a similar rating on CNBC.
“We are in the very early stages of legalizing sports betting,” Reeg said Monday. “I expect to see states that have budget issues related to the post-Covid era that can look at sports and online as a way to raise tax revenue.”