In a groundbreaking development, two industry giants, Penn Entertainment and ESPN, have formally announced their collaboration through a 10-year agreement.
This landmark partnership gives rise to the emergence of ESPN Bet, a new brand that expects to make waves across the United States sports betting landscape.
Penn Entertainment will channel $1.5 billion into ESPN’s coffers over the next decade. Penn Entertainment will also secure $500 million worth of warrants, enabling the acquisition of approximately 31.8 million common shares of Penn.
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Delving into the Deal
Penn will will leverage ESPN’s brand, media prowess, and marketing expertise. Additionally,
ESPN Bet will replace Barstool Sportsbook and is planned to launch in 16 US states this fall: West Virginia, Virginia, Tennessee, Pennsylvania, Ohio, New Jersey, Michigan, Maryland, Massachusetts, Louisiana, Kansas, Indiana, Illinois, Iowa, Colorado, and Arizona.
The deal also involves the launch of a Hollywood Online Casino product, supplanting Barstool Casino in four states: West Virginia, Pennsylvania, New Jersey, and Michigan.
Penn Entertainment’s second online sportsbook, theScoreBet, will keep its nomenclature and continue operations in Canada.
Penn Entertainment’s Departure from Barstool Sports
Penn Entertainment has cut its ties with former media collaborator, Barstool Sports. It has sold 100% of Barstool Sport’s common shares back to its controversial founder David Portnoy in exchange for non-compete and additional restrictive pacts.
CEO of Penn Entertainment, Jay Snowden, expressed his gratitude to his former associates David Portnoy, Dan Katz, and Erika Ayers for their instrumental contributions to the rapid expansion of the company’s footprint across all 16 states of operation.
Snowden further stressed his aspiration for Barstool to rediscover its origins under its founding visionary’s guidance and offer its patrons authentic content with no restrictions on licensed gaming companies.
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Initial Reactions from Stakeholders
Extensive market research conducted by the Walt Disney Company, ESPN’s parent entity, culminated in the selection of Penn Entertainment as the preferred partner for this strategic decision less than a year after Pitaro’s announcement.
Pitaro wants to make ESPN Bet the leading sports wagering platform in North America and has recognized Penn Entertainment as the best long-term strategic partner to fulfill such goals.
ESPN’s CEO added that both parties bring something to the table as Penn’s state-of-the-art technology and experience of operating in the niche, combined with ESPN’s audience, can only contribute to the constant growth of both companies over the next ten years.
Penn’s CEO Jay Snowden stated the ESPN deal marked a big milestone in the evolution of his company. He intends to transform Penn Entertainment from a regional gaming operator to the country’s leading brand in sports betting entertainment. ESPN’s rich sports ecosystem, with more than 105 million unique digital visitors per month, will certainly help as it opens all kinds of doors for ESPN Bet to shine in this ever-growing niche.
