ESPN and Penn Entertainment Planning ESPN BET Sportsbook

ESPN and Penn Entertainment have agreed to a licensing agreement to develop ESPN BET as a sportsbook for American viewers. Later this fall, Penn will rebrand its current sportsbook to ESPN BET in the 16 states where it is authorized. A mobile app, website, mobile website, and mutually agreed-upon retail locations will all be part of the makeover. In addition to agreeing to pay ESPN $1.5 billion in cash over ten years, Penn also agreed to give ESPN $500 million worth of warrants to buy 31.8 million of its common shares. Depending on how well ESPN BET performs, bonus warrants may be awarded.

ESPN’s most recent push into sports gaming is the partnership. The company broadcasts odds on its website, TV shows, and daily multiplatform betting-focused shows. It provides long-running coverage of the gaming sector on its website and social media channels. Starting in the fall, the renamed product will be integrated into ESPN’s programming and content as its sole sportsbook. Bets can be placed by viewers using ESPN’s digital products.

According to ESPN Chairman Jimmy Pitaro, “Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products. The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN.”

Pitaro and Penn Entertainment CEO Jay Snowden jointly made the announcement, and Pitaro stated that he expects to use each company’s respective strengths “to create the type of experience that existing and new bettors will expect from both companies.”

Penn presently holds licenses to operate online sportsbooks in Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.

The American Gaming Association estimates that sportsbooks across the US took in $93.2 billion in wagers in 2022, a 63 percent increase over 2021. According to the AGA, legal sportsbooks generated $7.5 billion in revenue in 2022.

Pitaro had previously stated in November that the business would probably collaborate with an existing sportsbook rather than launch its own. He claimed that the choice would benefit both ESPN and the entire Walt Disney Company.

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The sports betting industry will continue to be covered by ESPN’s news and information sources. The business has also committed to creating an ESPN committee for responsible gaming, putting responsible marketing policies and procedures in place to protect fans, and collaborating with experts in the field on the best practices for programming that promotes responsible gaming.

ESPN and Penn face a tough market to dominate because FanDuel and DraftKings currently control more than 70% of the U.S. sports betting market. If you include Caesars and BetMGM, that percentage goes up to 90%. That has not dissuaded ESPN or Penn. “You’ve got to have scale to compete. … We’re ready to compete at a scale level,” Penn President and CEO Jay Snowden said. “We’re not doing this deal to be 4% or 5% market-share players. That’s not going to be acceptable for us. It’s not going to be acceptable for ESPN. You should assume if those are the ranges we’re in, that’s not going to work out long-term.”