Michigan State University and Caesars Finally End $9 Million Sports Betting Deal

Jessica Aletor
By:
Jessica Aletor
02/06/2023/
News
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Highlights

  • Since 2022, Michigan State University has come under tough scrutiny for its athletic department’s deal with Caesars Sportsbook.
  • The sports betting promotional agreement was to run for five years generating over $9 million to MSU sports teams.
  • A new report has emerged suggesting that both parties have moved to terminate the highly lucrative deal.

It’s been a tough year for Caesars Sportsbook since news came out that the leading sports betting brand was engaged in promotional deals with several college athletic bodies. Michigan State University and the Louisiana State University were two prominent colleges that Caesars entered into deals with.

The MSU deal was expected to bring in about $9 million to its athletic department while giving Caesars the opportunity to promote sports betting within the college environment. However, all that changed after a New York Times report criticizing the deal emerged. Soon after, the American Gaming Association updated its code to ban sportsbooks from entering into marketing deals with universities.

In an expected culmination of events, both MSU and Caesars have ended their partnership agreement. While this would be celebrated across several quarters passionate about responsible gaming, others feel there was no reasonable basis to terminate the deal. At Gamble Online Michigan, we’ve reported each progression of this story, and now, we’ll let you see how it all ends and why it did.

Pressure on MSU Piled After Professors Started a Viral Petition

Ideally, the MSU-Caesars deal was expected to last till at least 2027. However, in April, as the news of the deal gained increasing popularity, MSU professors took it upon themselves to engage the situation. They immediately created a petition, calling for the school to stop what they described as “selling students out.”

Truly, the deal between Michigan State University and Caesars did not stop at having the sportsbooks ads on display at college sports matches. In fact, it gave the sports betting company access to students’ emails and ensured Caesars’ employees get free tickets and seats at games involving the MSU athletic department.

The petition in part read:

“If we create even one problem gambler, that will be too many, but probably we are creating hundreds of them. MSU has declined to comment on any of the news stories about university partnerships with sports betting companies. Declining to comment is a good idea, because our position is indefensible.”

“With our partnership with Caesars,” the petition continued, “MSU is selling out for profit at the expense of our students’ well-being.”

Arguably, this was the last straw that broke the camel’s back and forced MSU to back out. MSU athletic director, Alan Haller commented on the new development and noted that the university did not consider it wise enough to continue.

“Initially, it was a good thing, but I don’t think it’s in our best interest moving forward,” Haller said. 

MSU Confident of Securing Other Financing Opportunities

Sports betting has been an indirect part of budgets for university teams over the years. What changed with the Caesars-MSU deal is that the role of online sports betting revenue became more prominent on campuses. On the other hand, a new NCAA report showed that 67% of students on campuses were bettors while 41% of students who were members of their college sports teams have bet on games.

This reveals that sports betting is eating into the fabric of college sports and universities cannot seem to be at the forefront of promoting such addictive behavior through partnerships. MSU has claimed that it can definitely replace the revenue that was supposed to accrue from the deal with Caesars.

“From a financial perspective, we feel that there will be growth in other sponsorship categories that will take over inventory that was allocated to this particular client,” Paul Schager, MSU executive associate athletic director for external relations, said.

It is yet to be seen how the college intends to actualize this, but there’s evidence that the athletics department in the MSU has been growing, with stunning at the NCAA Men’s Lacrosse being their latest achievement.

How Will AGA Rules Affect Caesars Sportsbook in the Future?

Many spectators initially wondered if Caesars would adopt the new AGA Responsible Marketing Code for Sports Wagering, considering that it wasn’t a member of the AGA. However, not only is the sportsbook now ending ties with MSU, but it is also making moves towards terminating partnerships with LSU and other universities across the country.

Over the next couple of years, Caesars may still have to respect new rules from the AGA, especially if those rules have attained wide industry adoption or relate to sentimental topics like responsible gaming. So, despite not being an AGA member, Caesars may find itself at the receiving end of many of its policies and may be obliged to respect them.

The AGA rules are not the first to seek to clampdown on some form of marketing. In February, Representative Paul Tonko proposed a federal bill at the House to ban sportsbook advertising throughout the United States. The bill aims to prohibit sports betting ads on TV, radio, or the internet. The AGA and other stakeholders have, however, kicked against the bill as it may stifle business. But there’s no denying that operators need to subsequently avoid betting ads that will have minors or college students at the receiving end.

Jessica is a news contributor to Gamble Online Michigan. She holds a Bachelor's degree in Economics but has over three years of experience working in the hospitality and gambling industry. Despite her core finance and investment banking background, she has been a casino feature writer for N1 Interactive Limited and multiple gambling affiliate sites. Her work has been featured on the bet365 blog, casino.zone and Max Force Racing. She spends her time between Michigan and California, staying up-to-date on the latest industry developments