Why DraftKings Sportsbook Deal With Caesars Isn’t Bearing Fruit in PA

Back in February 2019, DraftKings and Caesars Entertainment announced a partnership that will help DraftKings enter into a number of states with legal sports betting and online gambling. Caesars received an undisclosed equity stake in DraftKings as part of the deal. They will also get a cut of DraftKings gambling revenue in the states where the two partner up. For DraftKings, they get a path into a number of states where Caesars has properties. DraftKings will promote Caesars Entertainment as its official casino resort partner in states where the two companies collaborate. They will also reportedly have access to host events at Caesars casinos. In turn, Caesars gains access to DraftKings’ 10 million customers.

However, there is one state that DraftKings will not be gaining entry into as part of this deal, and it is a big one. Pennsylvania is one state that DraftKings will not be entering via their partnership with Caesars. This is due to the state’s “single skin” law that is associated with sports betting.

What Does Single Skin Mean?

Under Pennsylvania law, sports betting licenses only allow for one skin. “Through a single interactive website or mobile application that clearly and prominently displays the name of the sports wagering certificate holder.” This means that a casino can only operate one sportsbook app under their license. For example, Rivers Casino in Pittsburgh, PA can’t have a FanDuel Sportsbook, DraftKings Sportsbook, and their own Rivers mobile betting app. Only one is allowed.

FanDuel was able to get into Pennsylvania via Valley Forge Casino. Under the law, the Valley Forge name has to be “prominently” displayed, hence the name FanDuel at Valley Forge Casino. DraftKings is having no such luck with their partnership with Caesars. Caesars Entertainment’s Harrah’s Philadelphia is their Pennsylvania property. They have already confirmed that they will be continuing with the Caesars’ themed sportsbook, as opposed to adopting the DraftKings brand.

Did DraftKings Get The Short End of The Deal?

It sounds like DraftKings may have gotten the short end of the stick in terms of being able to enter the Pennsylvania sports betting market. Perhaps they did. A press release of the deal did not state that Pennsylvania was excluded. However, there was language in the deal that said Caesars would operate without DraftKings in a limited market. “Caesars can also continue to offer their own branded sports betting and online casino apps in each of these jurisdictions – and will maintain their own primary access in all states according to regulation under the agreement.” This may have been targeted at Pennsylvania directly.

While DraftKings had to of known that this was possible when they agreed to the deal with Caesars, nothing was established at the time, at least not publicly. Now DraftKings has to find another way into the Pennsylvania market.

How Does DraftKings Get Into PA?

While the situation is not ideal for DraftKings, it also isn’t the end of their Pennsylvania sportsbook dream. DraftKings can still make its way into the Pennsylvania sports betting world. However, it won’t be through Caesars.

Penn National and DraftKings announced a partnership last December in West Virginia. This may also be their ticket into Pennsylvania. Penn National is the new owner of The Meadows Racetrack and Casino in Washington, PA (25 miles outside of Pittsburgh). The Meadows has yet to apply for a sports betting license. The window to apply for an online casino license is closed, but they can still apply for a sports betting license. If they do, it is possible that DraftKings could make its way there. Although, they wouldn’t be able to offer any casino games under the license, just a sportsbook. Still, sportsbook only is better than nothing in a huge Pennsylvania market.

Outside of The Meadows, the options are slim to none for DraftKings. Now that Penn National has taken over the Meadows, perhaps they will finally apply for a sports betting license. If they do, you can expect DraftKings to be the front runner to land that partnership.

  
Calvin is a sports betting enthusiast that has been in the business for over 10 years. He has created successful betting formulas for seven different sports. way too serious Packers, Mets, and Avalanche fan that hates everything Pittsburgh, despite living there.

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