Caesars Enhances Sports Betting with Zero Flux Acquisition

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00:00All right, welcome back to Newswire, let's get it started with Sam McQuillan from Legal

00:06Sports Report.

00:07Dive into a number of topics, including a potential sale with Flutter, maybe moving

00:13into a different market as far as sports betting, or at least an acquisition, and we'll get

00:17into some other topics as well.

00:18Sam, great to have you back here on Newswire.

00:20Thanks for coming on.

00:21Yeah, Craig.

00:22Thanks for having me.

00:23All right, let's get started.

00:25Caesar Sportsbook, making news.

00:26You guys have a column out over at Legal Sports Report looking to bolster some of their

00:31offerings.

00:32Tell us more about those details.

00:34Yeah, Caesar's just acquired a sports betting technology company called Zero Flux.

00:40In a move, the company says it's going to bolster its product offerings, mainly around

00:44same-game parlays.

00:46This is a company that's one of those business-to-business tech software providers that works with sportsbooks

00:52like Caesar's to help refine their product, essentially using certain pricing technology

00:58and data the company has and their own technology to kind of refine things, make things faster,

01:05allow companies to have more markets available.

01:07A lot of the reason that companies don't have certain markets available is because their

01:11data isn't fast enough to process things, so these companies help them out with it.

01:16Caesar's is a company that started off, obviously, not as a sports betting technology company.

01:20Obviously, it owns a lot of casinos.

01:22Even companies like DraftKings start off as a fantasy sports company, so we've seen companies

01:28do this kind of thing before.

01:29It's becoming quite a trend where they will just outright buy the B2B providers that they

01:34work with and then kind of bring in their own technology, use that to build what they

01:38call their in-house technology, and make it even better.

01:41BetMGM just did this when their parent company, Intane, bought Angstrom.

01:45DraftKings did this when it bought SB Tech in 2020, did it again actually a few months

01:50ago when it bought SportsIQ Analytics, so this is something we're seeing more and more

01:54of, and it's interesting to see a company like Caesar's, which has kind of been talking

01:58about focusing on iGaming and casinos and leveraging customers in that base, do something

02:04here to kind of bolster its sports betting business, and this is a company they say has

02:08really helped them expand major league baseball offerings.

02:12If you couldn't combine things in a parlay before, like Aaron Judge to score a home run,

02:17Luis Hill to record over six and a half strikeouts, and the Yankees to win, if you couldn't do

02:21that before, you can now.

02:23It's allowing people more options so they don't go to a competitor.

02:26It's interesting to see them do this move now ahead of football season.

02:30You have to think maybe they're hooking up something there.

02:33Obviously, parlays are very popular, football, very popular, not breaking news there, so

02:37it's interesting to see Caesar's, maybe that's what they're preparing for.

02:41You don't know how long this kind of integration will take place, but I would be surprised

02:45if this is the last sort of deal like this that we see for a while.

02:48Yeah, I think you're going to hear a lot more news about sports betting and some different

02:52options from all of the books as we get closer to football season, and we're almost there.

02:56And speaking of which, in advance of football season, there's a panel going on, I believe

03:01next week, if I'm not mistaken, a pro sports betting panel.

03:05I know you guys wrote about this over at Legal Sports Report, and so naturally, what I wanted

03:09to see, Sam, is, okay, who are the pro sports bettors, right?

03:13And who is going to be speaking there?

03:14And none other than, I think I saw Billy Walters speaking at this panel, too, and he doesn't

03:18do a lot of these.

03:19Yes, correct, Craig, yeah, we'll have, Billy Walters will be speaking at the National Council

03:25of Legislators from Gaming States, which is this conference that meets twice a year, which

03:31is pretty important, actually, you see a lot of ideas come out of this stuff.

03:34Last year, they met in Colorado, I think in around October, and then all of this, you

03:38had one company talk about certain fantasy sports companies that they thought were doing

03:43sports betting, and then all of a sudden, you had like, almost, I think, over a dozen

03:46states just slowly roll out over that very topic.

03:50So it's really a place where these ideas come to the forefront, you have lawmakers from

03:54all around the country sharing ideas, learning from different panels, a lot of the times

03:58it'll be new states that, hey, we don't really, we haven't had sports betting for a while,

04:02how do you do it in New Jersey, per se, they learn from those people, or they get inspired.

04:06We actually just had a conference a couple months ago, where Massachusetts regulators

04:10said they were inspired by Michigan cracking down on Nevada, so then they're going to go

04:14crack down on them.

04:15But to your point about having the gambler's voice, quote, unquote, heard, this can be

04:19the first year that they have folks like Billy Walters, obviously, a legendary sports better,

04:23they're going to have Richard Shoitz as well, I hope I'm saying his last name correctly,

04:28I only ever see it online, who's also an industry veteran, as well as a guy we've talked about

04:33on the show before, Spanky Gudun Chorolos, who is a pretty big following online, he obviously

04:39is named in that lawsuit that someone filed against him and DraftKings for extortion and

04:46illegal betting.

04:47He's denied all those charges.

04:49My colleague, Mike Mazzio, caught up with the guy who essentially runs the conference

04:54known as Nicol G's, he's a congressman from West Virginia, or a representative rather

04:58from West Virginia, who said, that's not really an issue, this lawsuit, it's not really any

05:02of our business.

05:03What they're expected to talk about is going to be some of his business, it's going to

05:07be talking about limiting players, which we've talked about in this show a bunch, very

05:11hot topic in the industry right now, essentially, you know, if you have someone whose money

05:15is too good, or someone who's winning too much at a certain book, they can get limited

05:18or for a myriad of other reasons as well.

05:21But that's really why people bang the drum saying, why can't I bet here, I want to be

05:24able to bet it's not fair that you squeeze me out, Massachusetts has taken up the mantle

05:29and talking about this and kind of making it relevant.

05:31I think it pissed a lot of regulators off, not just in Massachusetts, when the sports

05:36books didn't show up to that panel where they were supposed to answer these questions.

05:39That's supposed to happen now in the coming months.

05:41But I imagine that'll be a big topic at the conference, especially because Billy Walters

05:45has called it like supposedly his dream to have a state where you're not limiting players

05:51and people can sort of bet freely.

05:53So it should be a really interesting conference to go around with some new topics.

05:56And I imagine just hearing about it and learning about it will inspire a lot of states to take

06:00action of their own similar to Massachusetts.

06:02Yeah, I like the idea.

06:04And so naturally, it's kind of hard to identify who these pro sports bettors are, but maybe

06:08some context given next week to see just exactly how this industry moves forward, again, maybe

06:13potentially limiting sports bettors as well.

06:15I'm always curious about that.

06:17Also curious about Flutter's interest in this potential deal with Penn Entertainment and

06:21Boyd.

06:22Is it possible Flutter is looking to take this company on?

06:25Is there an acquisition in line here?

06:28Yeah, it's definitely possible.

06:31The talk of Penn acquisition became a relevant thing again, a few months ago, May 31st.

06:37One investor sent a letter basically urging the company to sell after Boyd had tried to

06:44make this takeover bid to acquire Penn.

06:47But where Flutter comes into play here is Boyd Gaming isn't really in the online sports

06:52betting business, like a company like Flutter is, FanDuel obviously is pretty much the number

06:56one sports book, number one or number two, depending on what state you look at in terms

07:00of the market.

07:01But where Flutter would come in, it actually has a partnership with Boyd right now, where

07:05because Boyd has so many casinos in different states, Flutter does not have a physical presence

07:11in states like Boyd.

07:12It uses Boyd's physical presence to give it market access in certain states and in exchange

07:17to give Boyd about 5% of the proceeds they get from FanDuel in those states.

07:21Where they would come in here is if Boyd were to take over Penn, then Flutter would probably

07:26be involved in facilitating that deal by acquiring the quote-unquote interactive segment

07:32that Penn has, that's ESPN bet, which is pretty much a $2 billion question that looms over

07:37this whole thing.

07:38Then you have Disney getting involved, like, hey, we signed on with Penn.

07:42We took years and years to get into this.

07:45We wanted to make sure we found the right partner and everything.

07:48All of a sudden, now we're going to be partnering with FanDuel.

07:50So it becomes tricky when you think about all the different parties involved, whether

07:53or not there's an escape clause for Disney under that circumstance, it's something to

07:59consider as well.

08:00We don't have the full parameters of the deal, but we are seeing Penn stock really on the

08:04upswing.

08:05It's up about like 35% ever since this takeover bid was made, ever since this letter from

08:11the investors came out as well.

08:12So there's a lot of pressure for Penn to sell, but Penn has been in this for a long time

08:16and they just sort of restarted their whole sports betting thing by getting rid of Barstool

08:21last year and getting in with ESPN bet.

08:23So this would be another big shakeup, either way it turns out.

08:27It could be big for Flutter, could be bad for Penn, could be good for Boyd, could be

08:31bad for everybody.

08:32Who knows?

08:33We'll have to see.

08:34Yeah.

08:35No, it's still a long ways away from it.

08:36It's just, I guess, noteworthy at this point, we've seen Fanatics and some of these other

08:40companies jumping in.

08:41We've seen some companies exiting out.

08:44I know Betway left this past week, and I think it's just noteworthy that a company like Flutter

08:48would even consider buying another one of these entities when a lot of them are actually

08:53leaving too.

08:54So it makes me think that maybe there's more to some of these stories, but we'll get to

08:58that when we get there.

08:59Sam, thanks again for coming on Newswire.

09:00Yeah, absolutely.

09:01Thanks, Craig.

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