Chris Boline
Caesars entertainment, the fourth-largest gaming company in the world, has officially partnered with the Houston Texans of the NFL to become the team’s official casino sponsor. If you’re a little confused you’re not alone. The state of Texas, after all, is among those that have yet to legalize sports betting.
So…what gives? Is this a sign that Dallas Cowboys owner Jerry Jones was right and legalized sports betting will inevitably come to Texas? Is this merely a partnership of convenience? Does it in fact mean nothing at all?
Let’s break down the impact of the Houston Texans signing a partnership with Caesars Entertainment.
Interesting Terms of the Partnership Between Texans and Caesars
It turns out there are no direct gambling implications of the Texans partnering with Caesars. This, again, is to be expected. Texas hasn’t yet legalized sports betting. Caesars is acting only as an official sponsor of the NFL franchise and nothing more.
For now.
Caesars, which has annual revenues closing in on $7 billion, is clearly playing a longer game here. We will get into that shortly. For now, they will be a partner with the Texans in name only, with minimal cross promotion.
One of the only programs they will be running with Houston is a “Schedule Pick ‘Em.” Fans will have the opportunity to submit their picks for games and certain event outcomes provided by Caesars. Each week, there will be a winner who gets one of many potential prizes—including a possible all-expenses paid trip to one of Caesars’ many casino locations.
The catch, of course, is there will be no official betting involved. This entire promotion will be considered a free play. Fans will be allowed to download a specific app, register, submit their “Schedule Pick ‘Em” decisions and that’s it. But let’s be real: Is that actually the endgame? Would Caesars really get into a partnership that doesn’t allow for a potential on-site sportsbook or betting-app promotions down the road?
Caesars Making Investment in Future of Sports Betting Throughout Texas
Most can probably guess that Caesars is hoping sports betting will eventually be legalized in Texas. There is very little long-term upside to this partnership if it’s not, and they signed a multiyear deal with the Texans rather than a shorter-term agreement.
As for what happens with Caesars if sports betting gets legalized in Texas, we can’t be quite sure. But based on similar partnerships being signed with NFL teams in other states where sports betting is already legal, the relationship between casino and franchise stands to run extremely deep.
The ability to promote their casino and betting app will be an obvious part of any next step. Caesars could inevitably run specials for Texas residents in their app and hold cash-entry tournaments each week. They can even host promotions for those who attend the game. Sports betting apps are equipped with geo-tracking data. They can tell if you’re at the stadium and give you access to special lines or NFL props related to the game in question.
Granted, the mother of all potential benefits if sports gambling gets legalized in Texas is the chance to erect on-site gambling hubs. Certain stadiums and arenas already have sports-betting kiosks and cashiers in place that allow attendees to place and collect on wagers. That part of the business model is huge for domestic sportsbooks. Their apps and online sites will always have to grapple with off-short competition. The capacity to offer on-site options reaches clients in a different way. There are also impromptu bettors who may only decide to submit wagers once they’re at the game. If they’re at home, on the other hand, they may have passed on the opportunity.
Again: It isn’t clear whether this is what would happen with Caesars and the Texans should Texas eventually legalize sports betting. Then again, in all likelihood, this is probably exactly what would happen.
Is Caesars Making a Worthwhile Investment?
While we don’t know the exact amount Caesars is paying to join forces with the Texans, we can assume it’s a small ransom. NFL teams don’t simply give away partnerships for free. They are a money-printing operation. No professional sports league in North America is in higher demand.
On the flip side, the Texans don’t have the leverage to extract a ton of money from Caesars up front. It would be different if they could promise Caesars the chance to put up on-site betting hubs and run specials. They can’t. That only becomes possible if and when sports betting is legalized throughout Texas.
For Caesars’ part, they’re actually making a calculated gamble. They’re probably getting discounted access to an NFL team in an untapped market. Then, if sports betting is legalized, they will be able to reap all of the perks we outlined above without paying the premium it would have cost them if they signed this deal when Texas already legalized gambling.
Indeed, there could be a clause in the contract that demands Caesars pay out more to the Texans in the event sports betting is green lit throughout the state. In fact, there probably is some sort of addendum. It likely focuses on revenue share. Still, Caesars is bound to come out ahead if Texas legalizes sports betting. The Texans, you see, aren’t expected to be very good this year or next. That gives them even less leverage in negotiations. And that uniquely sets up Caesars to capitalize on a shift in the Texas-betting landscape.
In the meantime, Caesars is putting their name in front of a larger audience by virtue of associating themselves with an NFL team at all. And while their partnership with the Texans may not suggest anything about the future of gambling in Texas at large, it is a sign of changing times. Casinos and sports leagues now operate in tandem, and their ties to one another should only grow stronger in the coming years.
