Caesars Conspicuously Absent From California Sports Betting Political Brawl

Written By Steve Friess on July 6, 2022 - Last Updated on August 2, 2022
Caesars CA sports bet

Caesars Entertainment, the largest national casino company with business in California, is staying out of the developing political battle between corporate gambling companies and Native American tribes over the future of the nation’s largest potential sports betting market.

“There’s no upside for us in getting involved,” says a Caesars executive who spoke to PlayCA on condition of anonymity. “If anything passes, we profit.”

Caesars spokeswoman Kate Whiteley said the company has no comment about the California drama.

Breakdown of California sports betting propositions

Dueling California sports betting propositions are slated to appear on the November ballot in the Golden State. One, the California Sports Wagering Regulation and Unlawful Gambling Enforcement Act, would allow sports betting at tribal casinos and the state’s racetracks.

The measure also would legalize live roulette and dice games in California. This measure is supported by a large collaborative of California tribes including the California Nations Indian Gaming Association.

The other measure, the California Solutions to Homelessness and Mental Health Act, would legalize online sports betting by major national gaming companies already licensed in 10 other states and willing to pony up $100 million for their Golden State license.

Those companies will need a tribal partner. The leading supporters of this measure are most of the companies that could meet those qualifications – namely BetMGM, Penn National, Wynn Resorts, Bally’s, FanDuel and DraftKings.

Avoiding the political war

The glaring exception to that list: Caesars, which operates Harrah’s Resort Southern California casino-resort about 45 miles north of San Diego in partnership with the Rincon Band of Lusieno Indians and Harrah’s Resort Northern California about an hour southeast of Sacramento with Buena Vista Rancheria of Mi-Wuk Indians.

Both are members of CNIGA, which has endorsed the tribal brick-and-mortar sports betting proposal and opposes the corporate casino gambit. The campaigns are expected to be explosive and expensive – each side promises to spend $100 million in advertising to both support their chosen proposition and to attack the other one.

“If you’re Caesars, you don’t want to poison the relationships you have, so maybe the play is just spend nothing and that way, when these things fail, you can still walk up to and look at everyone in the eye and say, ‘Hey, yeah, we’re still here. Nice try,’ ” says John Holden, a professor at Oklahoma State University who studies sports gambling policy. “Probably sitting on the fence and saying nothing is probably the best move forward for them.”

Sports betting in California is no sure bet

And many political observers believe that both competing measures are doomed as voters get confused and soured amid the highly negative, omnipresent political campaigns to come.

Also sitting on the sidelines is a group called Tribal Sovereignty and Safe Gaming, which supports a proposition aimed for the 2024 ballot that would create a system of tribal-operated mobile sports betting.

Longtime political consultant Rob Stutzman, the spokesperson for that group, speculates that polling that shows the 2022 corporate casino proposition is unpopular with voters could also explain Caesars’ decision. He’s seen polling that shows that measure has just 38% support; political conventional wisdom in California is that props need to start out in the high 50’s to have a chance of withstanding the negative campaign and triumph.

“We think there may be some companies that have concluded that this is a fool’s errand that DraftKings and FanDuel and BetMGM are on,” he says.

Indeed, Caesars has little eagerness to join any campaigns that offend any tribes. The company is the largest commercial casino partner of indigenous nations – there are five Caesars-operated casinos in California, Arizona and North Carolina, not to mention iGaming partnerships with tribes in some states with online gambling.

Sports betting playbook remains the same

The company also took no part in the failed effort in Florida to put a constitutional amendment on the ballot this year also supported by FanDuel and DraftKings as well as Las Vegas Sands that would have legalized sports betting at professional sporting venues, pari-mutuel facilities and via the internet. In Florida, as of now, only the Seminoles are authorized to run any form of sports betting.

Holden offers another intriguing reason not to support the corporate casino efforts: Sports betting is just not profitable enough.

In 2021, the budding online sports gambling industry earned an overall $4.29 billion in revenue on handle of $57.2 billion, a pittance compared to the $53 billion brought in nationally from all gambling operations.

Too rich for Caesars’ blood?

In both California and Florida, these political campaigns are costing each entity tens of millions of dollars – and in California, the cost of participating in the market under the corporate casino prop is $100 million. While in some cases it’s a way of positioning a company for the prospect of online casino, which is significantly more profitable, the idea of offending tribal allies for something so uncertain is not a great idea, Holden posits.

“If you’re Caesars, where you’ve got other products that are much better at producing revenue than sports betting, it doesn’t make a lot of sense to throw a ton of money into sports betting where you may lose the market to FanDuel and DraftKings anyway,” Holden says. “Maybe you end up, in a fully mature market, with 15 percent. From a revenue perspective, I’m not sure that that’s where Caesars wants to invest its resources.”

Caesars ‘not relevant’ in California sports betting war?

Both officially and off-the-record, Caesars’ tribal partners in California say they are unbothered by the company’s silence.

Kathy Fairbanks, spokesperson for the tribal casino campaigns for the brick-and-mortar proposition and against the corporate casino one, says she doesn’t know why Caesars is sitting this out – and she doesn’t care.

“I can’t comment on why they’re not doing it,” she says. “We’re focused on passing our measure and defeating the other one and working to educate voters about the various provisions of each one, and why the corporate one is going to be harmful for California. From our perspective, it’s not really relevant who’s behind the corporate one other than to focus on the fact that the corporations are not tribes.”

A member of the Rincon Tribal Council, who spoke on condition of anonymity because they were not authorized to comment, says Caesars is wise not to get involved at all.

“It’s not that we would abandon our partnership with them if we were on opposite sides of something politically, but they are showing respect,” the councilperson tells PlayCA. “The DraftKings-Fan Duel proposition is just not a good bet. It won’t pass. Caesars is smart not to get involved.”

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Steve Friess

Steve Friess is the national gambling industry correspondent for PlayCA. He is also a contributing writer for Newsweek. A Long Island native who earned a journalism degree at Northwestern University, Friess worked at newspapers in Rockford, Ill., Las Vegas, and South Florida before launching a freelance career in Beijing, China, where he served as chief China correspondent for USA Today. After his return to the U.S. in 2003, he settled in Las Vegas, where he covered the gambling industry and the American Southwest regularly for The New York Times, Playboy, The New Republic, Time, Portfolio, BusinessWeek, Newsweek, New York magazine, and many others. During that time, he created and co-hosted two successful and groundbreaking podcasts, the celebrity-interview show The Strip and the animal affairs program The Petcast. In 2011-12, Friess was a Knight-Wallace Fellow for at the University of Michigan. That was followed by a stint as a senior writer covering the intersection of technology and politics at Politico in Washington, D.C., In 2013, he returned permanently to Ann Arbor, where he now lives with his husband, son, daughter and three Pomeranians. He tweets at @SteveFriess and can be reached at [email protected].

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