It's still months before the National Football League kicks off again, but the upcoming season is already looming large for some of the major names in U.S. sports betting.
“Football is clearly the big kahuna in this space,” said Tom Reeg, chief executive officer of Caesars Entertainment Inc., during a conference call on Tuesday. “The NFL is where you want to be.”
Nevada-based Caesars was announced in April as one of the first-ever U.S. sportsbook partners of the NFL, along with DraftKings Inc. and FanDuel. Caesars will continue as the NFL’s official casino sponsor as well, the league said, and will create “tentpole activations at key NFL events,” such as the 2022 NFL Draft in Las Vegas.
In April, Caesars also closed its approximately US$4-billion acquisition of U.K.-based William Hill PLC, with which it had operated a joint venture in the United States. Under that partnership, William Hill ran online sports betting operations using Caesars’ market access, as well as retail sports betting operations on the properties of Caesars and others.
During the first-quarter earnings call, Reeg said they would now rebrand the sports-betting operation to be entirely Caesars-themed. And asked during the call about the time it will take to build up the sports betting and online gambling business, Reeg’s answer was pegged to the gridiron.
“I would expect we will have a competitive business and brand by this coming football season,” he told analysts.
Ready for some football?
The comments by the Caesars CEO were followed by those of executives of Penn National Gaming Inc. and DraftKings that highlight the importance of football to sports-gaming companies — and the opportunity it offers. Legalized sports betting continues to spread across the U.S., and firms likely want to ensure they are there to capitalize on market opportunities that are available, particularly when it comes to the NFL.
Penn, for instance, plans on having their online Barstool Sportsbook app up and running in eight states by football season.
Wyomissing, Pa.-based Penn has 41 gaming properties spread across 19 states, but the company also bought 36 percent of digital-media company Barstool Sports in early 2020 for US$161.2 million. The two companies have formed a "strategic relationship" in which Barstool exclusively promotes Penn offerings, including the Barstool Sportsbook app.
Penn launched the Barstool Sportsbook app in Illinois in March. The app is also live in Pennsylvania and Michigan, and Penn says that more than 400,000 customers have registered so far, generating over US$660 million in handle and US$61 million in gaming revenue.
“We're going to be a lot more aggressive in terms of spending to acquire customers as we head into football season ‘21 than we were in football season ‘20 because we now have scale,” said Jay Snowden, Penn’s president and CEO, during a conference call for analysts and investors on Thursday morning. “We were launching in one state a year ago. Football season starts September, and this year we’re going to be in eight states.”
Rosier revenue picture
During their first-quarter earnings call with analysts and investors on Friday, DraftKings chief financial officer Jason Park said they will be ramping up external marketing "substantially" for the start of the NFL season.
The company also announced on Friday that it was again boosting expectations for revenue this year due to the solid start to 2021 and “well-executed launches” of mobile sports betting in Michigan and Virginia.
The Boston-based digital entertainment and gaming company said it was raising its revenue guidance for 2021 to a range of US$1.05 billion to US$1.15 billion from US$900 million to US$1 billion. The latest increase follows DraftKings hiking the revenue guidance back in February from US$750 million to US$850 million.
“The increase reflects solid performance in the first quarter of 2021, continued strong user activation due to the effectiveness of our marketing spend, well-executed launches of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia, and a modest contribution from our recently completed acquisitions,” DraftKings said in a press release on Friday. “This guidance also assumes that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today.”
