Lousiana Sports Betting a No-Go for State Colleges

The United States' attempt to put distance between the gambling industry and collegiate universities has officially reached the Louisiana sports betting market.

Earlier this summer, Caesars and Louisiana State University (LSU) both announced that they would be terminating their partnership. There were apparently multiple years left on the deal, but the dissolution was part of a larger effort to better regulate the business of sports betting in Louisiana, as well as the rest of the country.

Why did this partnership end? What does it say about the state of sports betting in the United States as we navigate the back end of 2023? Are there any other instances of colleges and gambling operators ending their partnerships in the middle of deals?

Let's go through all the details of this latest development and the impact it could have on the industry at large.

The Fate of Caesars and LSU is Part of a Larger Sports Betting Movement in the United States

Caesars didn't just end their ties to LSU. They also closed the door on their relationship with Michigan State. Both moves were a response to concern from state and federal governments. These dissolutions weren't even close to the first of their kind. We've seen similar things happen across a bunch of other states. Most recently, sports betting in Maryland implemented similar standards. Sam McQuillan of Legal Sports Report has more:

"Caesars is ending its last two known US college sports betting partnerships amid heightened concern about state and federal regulatory action. A spokesperson for PlayFly Sports, the media rights holder for athletic departments at LSU and Michigan State, confirmed both schools are finalizing the termination of their agreements to market Caesars Sportsbook. Both had multiple years left on their deals.

"Four schools have cut ties with betting sponsors since US Sen. Richard Blumenthal began calling on them to do so. In late March, Blumenthal called on 66 schools to disclose the details of all payments from betting companies, highlighting problem gambling risks for their students, the majority of whom are under most states’ legal betting age of 21. The American Gaming Association banned its members from promoting betting on campus as well. PointsBet has since ended its partnerships with the University of Colorado and the University of Maryland, though those decisions were unrelated to the AGA. Like Caesars, PointsBet is not an AGA member."

Underage gambling is the driving force behind heightened regulation on Louisiana sports betting and wagering in the rest of the country. Policymakers have grown increasingly concerned with the access that the best online sportsbooks in the United States are routinely granted to a demographic that technically can't gamble.

In most states, the legal sports betting age is 21. The vast majority of undergraduate students across the USA are younger than that. By allowing sports betting operators to advertise and market and carry out sponsorships on college campuses, universities were giving companies significant influence over the underage market. There have been many instances of sports betting companies being reprimanded for not properly vetting the age of users who wind up on their email lists.

Did Caesars Push Back Against Tighter Louisiana Sports Betting Regulations?

For the most part, sports betting companies have not put up serious fights against tighter regulations and expulsion from college campuses. Financially speaking, they may not need to. It isn't clear, for instance, how much Louisiana sports betting revenue Caesars generated from having a presence at LSU.

Experts throughout the industry, in fact, seem to believe operators may have pounced at the opportunity to extricate themselves from these deals. Universities like LSU were likely raking in millions as part of these agreements. Most don't think sportsbooks such as Caesars were making enough off those partnerships to justify the investment.

For their part, while Caesars Sportsbook did not aggressively fight this mandate from policymakers, they have argued that these sponsorships are worth the overhead. Caesars CEO Tom Reeg believes there is real value in acquiring exclusive sports betting rights at large universities with premier football and basketball programs, such as those found at LSU and Michigan State.

Are Sports Betting Partnerships with College Universities Gone for Good?

Our motto around these parts: Never say "never." We could very well see Louisiana sports betting eventually permitting deals between gambling operators and major universities once again. Even now, they're not technically illegal. Initiatives are on the table that could swing the pendulum in that direction. But nothing is official.

Still, for the time being, it does seem like Louisiana sports betting and the United States sports betting market in general have outgrown the need for these deals. The partnerships were first rolled out in 2020 and thereafter, in response to the global pandemic. These deals were a chance for Universities to drum up revenue at a time when they weren't making nearly as much.

As the world continues to move on from the coronavirus pandemic, colleges aren't suffering at the same scale. Sports programs are back up and running. Enrollment is on the come-up. And while universities may not have as many physical students on campus, most have adapted to the growing trend of remote learning.

Of course, colleges are largely for-profit entities masquerading as purveyors of higher-education. Those in charge would likely still welcome the chance to capitalize on these deals.

And if it weren't for the current rise in sports betting scandals involving both athletes and rogue advertisements that ended up in the hands of underage recipients, we might see places like LSU, Michigan State, the University of Maryland and other colleges fighting to keep their gambling partnerships.

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