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00:02 - All right, let's get to the latest in Kentucky.
00:05 Talk about Caesars and certainly their promotions
00:09 are involved.
00:10 That's the next story up on Legal Sports Report.
00:11 I know that you guys had a column recently on this.
00:14 So tell us more about the latest in Kentucky.
00:17 - Yeah, it was interesting.
00:18 Out in Vegas this week, it's the Global Gaming Expo
00:22 and people aren't just out there to sell slot machines.
00:25 A lot of that happens behind closed doors
00:28 and over the phone and Zoom these days, right?
00:31 It's really about meeting with people
00:33 and investors getting a chance to meet with analysts
00:37 and the companies and the companies getting a chance to meet.
00:40 And so we had a bunch of analyst reports come out
00:42 and I found this one about Caesars
00:44 from Steve Wysinski of Steeple, really interesting.
00:47 Caesars, as you know, when New York opened the market
00:53 for mobile sports betting,
00:54 Caesars went out and bought market share.
00:57 Simply put, they offered way more free money
01:01 than anybody else.
01:02 It was to the tune of like $3,300
01:05 that you could get in those first couple of weeks
01:06 in New York.
01:07 And that was shut off pretty quickly.
01:09 And when it was shut off, Caesars fell
01:12 and DraftKings and Fandles saw their rise.
01:15 And it also wound up costing Caesars like half a billion
01:20 dollars in EBITDA for just one quart.
01:22 So Caesars is a bigger company than just sports betting.
01:27 Can't really justify running that big of a red hole
01:31 when it has a bigger business it has to worry about.
01:34 And now it sounds like Caesars is really starting
01:37 to get it down.
01:38 Their average cost per customer acquisition in Kentucky,
01:42 it's been around a hundred bucks.
01:43 We usually hear around 200 to 300
01:46 when you're talking on a national level,
01:48 just in general these days.
01:50 Obviously that goes up when you have a new state launching
01:53 and Caesars in their estimate actually say
01:55 they think some operators have spent more than $1,000
01:58 per person in Kentucky.
02:00 So the fact that Caesars is able to get away from it
02:06 with just a hundred per person, and look,
02:09 they're saying now when the numbers come out,
02:11 yeah, we're gonna have lower market share.
02:14 But that's okay with Caesars.
02:18 They wanna be profitable with this.
02:20 They're not trying to drive losses
02:23 and just get market share anymore.
02:25 They tried that, they saw how it went,
02:27 and they saw how it really didn't pay to pay promotions
02:31 because at the end of the day,
02:32 people will leave and go grab those promotions.
02:34 Sure, they're gonna go right back to the books
02:36 they're more comfortable with.
02:37 So interesting stuff going on in Kentucky.
02:39 And we don't have a whole lot of states left to launch,
02:42 Greg, and the ones that we're all looking at, they're huge.
02:46 So obviously there's gonna be big spending
02:49 in a lot of the states that could come up,
02:52 like California, Texas.
02:55 But right now in Kentucky,
02:57 it's really interesting to see that one side
03:00 is getting away with paying a hundred per customer,
03:02 and another side is potentially paying four figures.
03:04 That's pretty wild to me.
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03:09 (bells chiming)
