Why Caesars Entertainment is Staying Out of California Sports Betting Debate

Why Caesars Entertainment is Staying Out of California Sports Betting Debate

When it comes to legal sports betting in California, everybody seems to have a strong opinion. Except for Caesars Entertainment.

Apparently.

This sounds weird on its face. At a time when everyone and their second cousin's spouse twice removed by divorce has thoughts on if either of the two California sports betting initiatives should be legalized in 2022, one of the largest gaming operators in the United States seems content to sit out the entire discussion. It would stand to reason that Caesars Entertainment would at least pick a side. After all, they stand to rake in millions, if not billions, in additional revenue if sports betting comes to California. And yet, they have so far remained on the entire subject, suggesting they're content with absolutely nothing changing this year or in the near future.

All of which begs the question: Why?

Why has Caesars Entertainment so far refused to weigh in on California sports betting at all? Why have they failed to even communicate their preference for which initiative gets passed in November? And why might remaining silent stand to benefit them, assuming it benefits them at all?

Caesars Entertainment Doesn't Want to Rock the Boat

Sports betting in California has become a hotly contested issue over the past year. There is a war of agendas playing out between commercial sportsbooks and tribal-operated casinos. This leads many to believe the issue is cut-and-dry. Commercial sportsbooks such as FanDuel, DraftKings, BetMGM and, yes, Caesars Entertainment should be pushing for the legalization of online betting in California while brick-and-mortar casinos prefer the initiative that limits sports gambling to on-site establishments.

However, unlike pretty much every other party directly tied to this fight, Caesars finds itself sitting on both sides of the fence because of their existing partnerships with select tribal casinos in the state of California. Consider what Howard Stutz wrote for The Nevada Independent:

"[Caesars CEO Tom] Reeg cited the company’s partnership in two California Indian casinos as the reason Caesars is staying out of the fray, even with predictions of a sports betting market that could produce more than $3 billion in annual gaming revenue.

'I struggle to think of a jurisdiction we would not go to in the U.S. if it opens,' Reeg said in response to a question about California by Macquarie Securities gaming analyst Chad Beynon, who asked about the company’s positioning in the state. 'We want to be everywhere, but in terms of California, we're not part of either initiative.'"

This essentially means Caesars is reluctant to rock the boat in any way. If they support Proposition 27, which calls for mobile and online sports betting in California offered by commercial bookmakers, they would be in direct opposition with Proposition 26, which is supported by a coalition of tribal casinos and restricts sports betting to those casinos only.

Caesars Could Be in a Win-Win Situation

Many executives from other commercial gaming operators have openly wondered why Caesars Entertainment won't deviate from this neutral stance. As we've pointed out in this space ad nauseam, sports betting projects to be worth $3 billion or more in the state of California. That is, without question, a larger market than Caesars currently has with their limited casino partnerships.

Still, Caesars Entertainment seems to be playing their hand wisely. No one knows which proposition, if either, will pass in November. Some, in fact, think it will be neither. And if Caesars supports a failed initiative, they risk ruining their partnerships with casinos that will remain up and running no matter what.

Look at this way: If proposition 26 passes, there will be sports betting allowed in a large swathe of California casinos. That will directly benefit Caesars, which has partnerships with a handful of those locations. On the other hand, if both Proposition 26 and 27 fail, tribal casinos will continue to be the only source of physical gaming in the state. And unlike many of their competitors, Caesars would remain embedded with the ones they're currently working alongside.

Supporting the legalization of online sports betting in California would jeopardize all of that. Would casinos still be willing to partner with Caesars Entertainment if they come out and support an initiative most of them have advocated against? Probably not.

Plus, it's not like Proposition 27 needs Caesars to get involved. This measure is already bankrolled by sports betting Goliaths like FanDuel and DraftKings. And it's not like Caesars won't join the licensing fray if the initiative passes. They will be just as capable of soliciting business from Californians as any one of the sites from our reviews of the top online sportsbooks. And when you frame it this way, staying out of the sports betting debate is merely a business decision for Caesars‚ÄĒand a smart one at that.

What Does Caesars Entertainment's Neutral Stance Say About Sports Betting in California?

As much as Caesars' neutral stance on California sports betting measures is a business decision, it is also indicative of the uncertainty surrounding the November ballot.

If any of the sports betting measures were guaranteed to pass, the company might be more inclined to voice some support. Given that Caesars Entertainment has instead elected to sit this out altogether, we know there's a real chance sports betting doesn't come to California this year.

And if that happens, residents throughout the state will want to strap in, because it'll be a long wait before anything changes.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your betting needs:

Meet the author

Dan Favale

Dan is a sports betting writer who can tackle any topic from presidential elections to changes in the sports betting legislation federally and on the state level. He also writes picks for NFL.