Caesars Entertainment (NASDAQ:CZR), the casino company formed from the merger of Eldorado Resorts Inc. and the original Caesars, announced today it is making a "strategic investment" in SuperDraft Inc., a fantasy sports platform. The move comes as multiple companies look to strengthen their presence in the online sports betting sector, which grew rapidly in 2020 and continues to strengthen as additional states legalize this form of gambling.
Neither party has revealed how much Caesars paid for its investment, but it has currently bought a minority stake in SuperDraft. The terms of the deal allow Caesars to buy a bigger stake in the company, if it decides to do so. That could be up to a 100% stake, or complete ownership. The exact timetable involved also hasn't yet been publicly revealed.
Caesars CEO Tom Reeg remarked that the "addition of daily fantasy sports fits seamlessly with our strategic vision for mobile and online sports" and that the stake will give his company access to a popular platform, enabling more flexible fantasy team building. The integration will go both ways, with SuperDraft users receiving credits under Caesars Rewards and using the Caesars wallet also.
Caesars may also be looking at SuperDraft as another potential avenue for building its presence in the online sports betting world. SuperDraft's strong presence in 35 states could be useful for rapidly entering digital sports gambling there once legalization occurs. Bally's Corporation (NYSE:BALY) is engaging in a similar initiative with its acquisition of fantasy sports platform Monkey Knife Fight. Bally will profit from the fantasy sports service itself and have immediate entry into the high-population states of Florida, California, and Texas once they eventually legalize online sportsbooks.