Caesars, DraftKings Jump After Companies Sign ESPN Betting Deals

Christopher Palmeri

15 Sep 2020, 08:44 AM IST

(Bloomberg) -- Shares of Caesars Entertainment Inc. and DraftKings Inc. jumped after the companies announced they would become “co-exclusive” sports-betting partners with Walt Disney Co.’s ESPN network.

Caesars, the largest owner of casinos in the U.S., will become a sponsor of ESPN’s fantasy-sports coverage and have links to its sports-betting business on ESPN websites in states where such gambling is allowed. Caesars already provides betting odds to ESPN, and the network recently opened a TV studio at the Linq, a Caesars property in Las Vegas.

DraftKings will also have links to its betting business on ESPN sites. The company will provide daily fantasy content to ESPN and have its brand appear on the broadcaster’s TV shows. The company is expected to spend more than $1 billion on external marketing through 2023, according to a note from Evercore ISI.

“Sports betting is quickly becoming endemic to the overall experience of the sports fan,” Mark Walker, senior vice president of business development and innovation at ESPN, said in a statement. “It is an industry that we will continue to actively pursue as it grows and evolves.”

Caesars rose as much as 12% to $56.26 in New York, their highest point since February, while DraftKings was up as much as 13% to $47.01, an all-time high.

Legal sports betting has exploded in the U.S. since the Supreme Court allowed states outside of Nevada to offer such wagering in 2018. Eighteen states and the District of Columbia now offer legal sports betting, and several more are considering, according to the American Gaming Association, a trade group.

A flurry of deals have been announced since then, including mergers, joint ventures and marketing arrangements. Caesars, for example, owns a piece of William Hill Plc’s U.S. arm, its partner for sports betting. William Hill is also the exclusive sports-wagering provider to the online operations of CBS Sports. Fox Corp. has a joint venture with Flutter Entertainment Plc to offer sports betting on a site called Fox Bet.