One of the major operators in the U.S. has a bead on a license to offer online sports betting in Massachusetts, but that permit would come via one of the company's usual rivals. 

According to a survey filed with the Massachusetts Gaming Commission, Caesars Sportsbook is in line to gain access to the state's soon-to-open market for online sports betting sites.

Caesars is angling to do so, however, through an agreement with Wynn Resorts, the owner of the Encore Boston Harbor casino and WynnBET. 

The agreement could allow Caesars to sidestep a competitive process for some mobile sports betting licenses and guarantee the operator a place in the Massachusetts market for legal sports betting.

That's because Massachusetts' sports-betting law allows for up to seven "untethered" licenses for online wagering, which will be awarded on a competitive basis, but guarantees brick-and-mortar casino operators like Wynn up to two mobile platforms.

So, while Caesars would still require a so-called "Category 3" license for mobile sports betting, the agreement with Wynn means Caesars may not have to fight for that permit.  

On Tuesday, a spokesperson for Encore Boston Harbor released a statement that read: "The company reached a preliminary agreement with Caesars Interactive Entertainment for Caesars to receive a tethered category three license... Such arrangements are common in other online gaming markets."

An intriguing arrangement 

Ironically, Caesars sued the chairman Massachusetts Gaming Commission in 2013, alleging a conflict of interest and favoritism towards Wynn Resorts, which opened the $2.6-billion Encore Boston Harbor in 2019. The lawsuit was eventually dismissed. 

But, by partnering with Wynn, Caesars could bypass what will likely be an intense competition among the top U.S. betting sites and online casinos for one of the seven coveted stand-alone mobile sports betting licenses that will be allocated by the MGC in the coming months.

The deal also affords Caesars Sportsbook some valuable lead time over the competition. It can immediately begin preparing to launch its sports-betting app in advance of the expected March rollout of mobile sports wagering in Massachusetts.

News of the deal was broken by local news organization MassLive and comes via an MGC scoping survey that requested sportsbook license applicants to supply information regarding investors, associations, and management structure.

15 skins up for grabs in Massachusetts

Under the terms of the Massachusetts sports betting bill that the state legislature passed at the last minute on August 1, the MGC has the discretion to award licenses to a maximum of 15 online sportsbooks.

Each of the state's three casinos has been granted two "skins," i.e., permissions to operate two sportsbooks affiliated or "tethered" to each retail location, with one skin going to each of Massachusetts' two racetracks, for a total of eight.

Should a prospective operator be unable to obtain a skin by partnering with one of those facilities, they will have to compete for the remaining seven "untethered" digital sports betting licenses.

Each casino will be using its primary skin for its own in-house sports wagering platform: Wynn's Encore Boston Harbor property expects to be able to launch its WynnBET platform; MGM Springfield will be offering bettors its BetMGM app; and Plainridge Park, operated by Penn Entertainment, will be deploying Penn's wholly-owned Barstool Sportsbook.

Encore Boston Harbor appears to be the only casino to have thus far allocated its second skin by partnering with Caesars. It is believed that the other two casinos will be partnering with sportsbooks in the near future, possibly with those operators who fail to make the cut for the seven untethered digital licenses.

None of the racetracks have announced any partnerships thus far and may well be waiting to secure deals from the same set of rejected applicants.

Caesars' partnership with Wynn opens up places for a smaller operator

Caesars' acquisition of one of Encore's two "skins" ipso facto means that there will be one less major operator vying for the seven untethered sports wagering licenses.

Among the leading candidates expected to win approval from the commission are FanDuel, the largest sportsbook by market share in the U.S., and its nearest competitor, Boston-based DraftKings, a virtual lock to obtain a digital license.

The MGC has so far received applications from 23 operators looking to set up shop in Massachusetts. Apart from FanDuel, DraftKings, and the three in-house tethered sportsbooks BetMGM, WynnBet, and Barstool, a list of favorites would include Bally Bet, BetRivers, Betr, and PointsBet.

However, the diversity-conscious and unpredictable MGC may ultimately decide to approve several underdog candidates in place of the bigger operators, given comments made by several commissioners in recent months.

Partnership may be a result of past litigation with MGC

News of the Caesars-Wynn partnership immediately led to speculation that Caesars was worried that its previous legal battle with the Gaming Commission might jeopardize its chances of winning license approval.

Caesars was hoping to build a Boston-area hotel and casino property in partnership with Suffolk Downs in 2013. But after filing its application for a retail operating license with the Gaming Commission, it pulled out of the bidding and filed a lawsuit against the MGC.

Not only did the commission ultimately grant a gaming license to Wynn, but Caesars' lawsuit was dismissed by a federal judge in 2014. This decision was later upheld on February 13, 2015, by the U.S. Court of Appeals for the First Circuit.

Caesars may well have decided that the safest way to enter the Massachusetts betting market was to ally itself with Wynn's Encore Boston Harbor. This very facility went up in place of Caesars' planned casino complex.