Caesars Entertainment secured the first sports betting partnership in Kentucky history.
Tuesday morning, Caesars Sportsbook announced a partnership with two Kentucky horse racetracks. The Las Vegas-based gaming giant officially partnered with Keeneland and Red Mile Gaming & Racing.
Both tracks are located in Lexington. As part of the agreement, Caesars will have retail sportsbooks at both venues. Additionally, the company will operate a Caesars Sportsbook Kentucky app for mobile betting.
Caesars Sportsbook officially becomes the first operator to set itself up to offer sports betting in Kentucky.
The Kentucky Horse Racing Commission must still approve the deal’s details.
“Keeneland and Red Mile are iconic horse racing venues with an important legacy in the state of Kentucky,” said the president of Caesars Digital, Eric Hession, in a press release. “Customers in the region have long enjoyed our world-class Caesars destinations and, most recently, our horse racing wagering app, Caesars Racebook. Working with these historic institutions provides an unmatched opportunity to reach sports and racing fans in the state, and we look forward to working with the Kentucky Horse Racing Commission as we prepare to launch later this year.”
Despite law, Caesars won’t accept bets from bettors under 21
Gov. Andy Beshear signed HB 551 into law at the end of March. The legislation legalized retail and online sports betting.
But unlike most states with legal betting, the bill allowed gamblers above 18 to bet on sports. Usually, states treat sports betting like traditional casino gaming and restrict it to those 21 and older.
Kentucky lawmakers said the age limit was consistent with the few other options for gambling in Kentucky; 18-year-olds can bet on horse races and buy lottery tickets in the Bluegrass State.
Despite the legal carveout, Caesars will only accept wagers from bettors at least 21 years old.
One possible reason for this move is that its Kentucky bettors will earn credits towards their Caesars Rewards account. Caesars’ customer loyalty program usually includes perks that require the bettor to be at least 21.
From a legal standpoint, Caesars is one of the more cautious gambling operators.
For example, Caesars Interactive Entertainment owns the World Series of Poker brand. In poker tournaments, it’s common for the final few players to make a deal for the remaining prize money. But because of liability concerns, Caesars will not facilitate those deals in its WSOP tournaments.
Online operators must partner with eligible venues for market access
Per HB 551, the state’s nine horse tracks and the Kentucky Speedway are the only venues eligible to operate a retail Kentucky sportsbook. Furthermore, those venues can partner with up to three companies to operate online sportsbooks.
Therefore, partnerships like this will probably be announced in the coming weeks and months. Larger companies like FanDuel, DraftKings and BetMGM will likely establish similar deals soon. Otherwise, they won’t be part of the Kentucky sports betting launch.
FanDuel and DraftKings already have horse racing deals with Churchill Downs, Kentucky’s largest horse racetrack and home to the Kentucky Derby. Given the existing relationship, it’s probable that Churchill Downs will ink a deal with at least one of those two companies.
Since the track can partner with up to three companies, both may get a sports betting deal with Churchill Downs. But that is incredibly unlikely. The more likely result is Churchill Downs partnering with one of them and another larger horse track inking a deal with the other.
Each venue partnering with one company usually happens in other states with similar laws.
Thus, the partnership between Caesars and the two racetracks functionally means that only eight venues are left to partner with.
Keeneland was built in 1936. Considered one of the country’s premier racetracks, it’s also the world’s largest thoroughbred auction house. Red Mile was built in 1875 and is the second-oldest harness racetrack in the world. Today, it’s also a historical horse racing (HHR) gambling parlor with more than 950 gaming machines.
What the deal means for Caesars in Kentucky
During his company’s first-quarter earnings call, Caesars CEO Tom Reeg projected a profitable 2023 for its online betting operations. In other words, Caesars believes Kentucky will help drive profit for it this year. Especially since it’s the only state with a scheduled launch in 2023.
Comments during the earnings call — and being the first to announce a presence in Kentucky — suggest Caesars is gearing up to make a splash in the state.
“The existing sports betting business continues to get more profitable, volumes continue to increase,” Reeg said on the call. “And you should expect that continues to drive positive EBITDA. That’s the bulk of what’s happening as yo see us inflect to the positive.”