- PENN Entertainment and ESPN announce an agreement to launch ESPN BET by the fall
- The new sportsbook will be live in the 16 legalized betting states where PENN Entertainment is licensed
- PENN Entertainment sold 100% of its Barstool Sports stock to original founder Dave Portnoy
ESPN has long been rumored to be interested in getting into the sports betting scene and that finally became a reality late this afternoon.
ESPN and PENN Entertainment today announced an agreement to launch ESPN BET by fall in 16 states where PENN is licensed to operate. Barstool Sportsbook will be rebranded as ESPN BET as the sports betting operator moves forward in the fall. There will be a guaranteed new user bonus for signing up at ESPN Bet.
According to a press release, PENN has secured the exclusive right to the ESPN BET trademark for online sports betting in the U.S. for an initial 10-year term which may be extended for an additional 10 years upon mutual agreement. PENN Entertainment agreed to pay $1.5 billion to ESPN over the initial 10-year term and grant ESPN approximately $500 million of warrants to purchase 31.8 million PENN common shares.
If ESPN BET meets a certain U.S. online sports betting market share, ESPN could receive bonus warrants to purchase an additional 6.4 million in PENN shares.
ESPN BET Will Launch in the Fall
The online Barstool Sportsbook will be rebranded ESPN BET in the fall of 2023, while theScore Bet will continue to operate in Canada. The rebrand includes the mobile app, website, and mobile website. PENN Entertainment will oversee the daily operations of ESPN BET sportsbook.
PENN Entertainment will host its Q2 2023 earning call tomorrow morning at 9 a.m.
Additionally, PENN Entertainment announced it has sold 100% of its Barstool Sports, Inc. common stock to original founder David Portnoy in exchange for certain non-compete and other restrictive covenants. PENN also has the right to receive 50% of the gross proceeds received by Portnoy if he chooses to sell or agrees to another monetization event of Barstool.
Emergency Press Conference – I Bought Back Barstool Sports pic.twitter.com/dmUk0eNowx
— Dave Portnoy (@stoolpresidente) August 8, 2023
PENN Entertainment CEO Jay Snowden thanked Barstool for being a great partner and said the partnership with ESPN is “another milestone” in PENN’s evolution.
“This transformative, exclusive agreement with ESPN marks another major milestone in PENN’s evolution from a pure-play U.S. regional gaming operator to a North American entertainment leader. ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem. ESPN Bet will also benefit from PENN’s operational experience, extensive market access and proprietary technology platform, which successfully debuted in the U.S. this July,” he said in a release.
ESPN President Jimmy Pitaro said PENN Entertainment is “the right long-term strategic partner to build ESPN Bet.”
“After meeting with Jay and the PENN team, it was clear that they were the right long-term strategic partner to build ESPN Bet into a leading U.S. sports betting platform. We are confident that the combination of our unparalleled audience along with PENN’s operational expertise and state-of-the-art technology provides us with a tremendous opportunity to serve the ever-growing number of consumers interested in betting,” he said in a release.
ESPN Sports Betting Rumors Persisted for Years
ESPN has long been rumored to be interested in the sports betting space. Interestingly, ESPN was linked to DraftKings on several occasions in the past. Last October, whispers out of the industry began to claim that ESPN was nearing a deal with DraftKings, one that Pitaro had to refute in November 2022 at the Sports Business Journal Media Innovators conference in New York.
“We’ve been exploring. We’ve had conversations with all the usual suspects, looking at what could be the logical next step for us. We are not going to, and I’ve said this repeatedly, we’re not going to create a book. We’re not going to take people’s money. We’re not going to set lines, spreads, and odds, it’s not what we do. The idea of leaning in a bit more here, creating a more seamless experience, it’s something that’s definitely on the table,” Pitaro said at the conference.
Pitaro’s comments were a stark contrast to rumors that surrounded ESPN in early October 2022, when several outlets reported the sports media giant was close to licensing its brand to DraftKings Sportsbook.
Bloomberg reported that ESPN and DraftKings was close to an agreement for the massive sports media company to license its brand to the sports betting operator. A deal makes sense, as ESPN and DraftKings already have an existing marketing partnership and ESPN has dipped its toes into sports gambling through content on its website and television shows.