While all the news from the sports betting world these days focuses on state after state trying to get their gambling industries up and running, Las Vegas remains the gold standard even though it may be flying under the radar. However, the sports betting landscape is shifting, and many believed the new nationwide competition would hurt the state of Nevada. While it is not certain as to what exactly has hurt Vegas as of late, their sportsbooks have been feeling the hit. It may be too early to predict what the next few years may bring, but there have been some changes Nevada would be wise to monitor.
Basketball Up, Football Down
Football usually dominates the Nevada sports betting handle, but basketball has been gaining ground in recent years and even took top honors this past January despite going up against NFL playoff games and the NCAA Championship tournament. Basketball bettors wagered almost $500 million at Nevada sportsbooks, and this was the first month under a half-billion in the last four. To make matters worse, the betting public did extremely well with casinos holding only $14.6 million which is under 3 percent. For context, the state’s sportsbooks held $25 million in the same month of 2018 with more than $418 million in wagers. Since the Super Bowl fell in early February, not even the biggest sports betting day of the year could help.
Then the really bad news: Nevada sports betting only generated $145 million in Super Bowl handle which represented an 8 percent drop from the year before, the largest year-over-year decline in the past decade. Ouch. While basketball betting helped steady the handle to the tune of more than $256 million in January, the money wagered did not lead to money gained. Basketball bettors cleaned up last month with a 2.3 percent hold ($5.8 million) for Nevada sportsbooks.
The postseason NFL contests brought $188 million in football wagers in Nevada casinos. However, the bettors slightly bettered the sports betting hold, as books kept more than $7.7 million, or just better than 4 percent. This also likely factored into an unusually light month for sportsbooks on parlays as the public parlayed more than $2.7 million and actually came out ahead with operators losing $15,000 for the month. Hockey, golf, tennis, and auto racing rang up just under $49 million in wagers and the books took down $2.1 million of those wagers, or roughly 4.3 percent. The combination of losing while not bringing in enough money is not the position anyone likes to be in, and that’s exactly where the Vegas sportsbooks find themselves.
DraftKings to the Rescue
Of course, these types of numbers are not out of the ordinary and the sports betting industry is one that ebbs and flows. No one knows this better than the Las Vegas. They’ve seen plenty of peaks and valleys in their time. The key to their success has always been staying current and this week’s partnership deal between Caesars Entertainment and DraftKings Sportsbook is testament to that. As we all know, DraftKings is the hot shot, new-kid-on-the-block and bringing them into the fold of the Vegas strip is as important for newcomers as it is for the city itself. DraftKings needs the cred, and Vegas needs the update.
This deal will give DraftKings Sportsbook access to operate in the states where Caesars runs their casinos while Caesars will receive an equity stake in DraftKings. Caesars operates more than 40 casinos in 13 states across the country, so DraftKings will also be getting the exposure they want.
Caesars Doing Their Part
The only question now is where will the sportsbook be placed. On the strip is, of course, the best for all parties. Last year, Caesars Entertainment announced that they were beginning to license the Caesars Palace, Flamingo, The Cromwell, and The Linq brands. Flamingo’s recent renovation gives it a chance. However, it has a much smaller brand which may not appeal to DraftKings. The Cromwell is a small property and has less than 200 hotel rooms, a small 40-seat sportsbook, and limited facilities, so it is probably out as DraftKings is looking to go big. Planet Hollywood isn’t a good fit either as they are a dated entity. The Linq may be their best option as it marketed for the younger, millennial guests. The Linq also has a new and unique sportsbook concept called The Book which is very popular.
Not only have they partnered up with DraftKings, but Caesars Entertainment has also signed a deal with Turner for a new Bleacher Report broadcast studio in their sportsbook. Bleacher Report and all of its media is another great addition for the Vegas brand. It shows they are not afraid to invest with the newcomers and that they are embracing the changes in their industry.