In a significant development for the sports betting industry, ESPN and Penn Entertainment have joined forces, carving out a $2 billion deal to launch ESPN BET.
This branded sportsbook is set to replace the existing Barstool Sportsbook. It will be available in all 16 states where PENN Entertainment is licensed for sports betting.
ESPN is set to receive $1.5 billion in cash over the ten-year term of the agreement, with an additional $500 million in warrants expected to vest over the same period.
This financial exchange will be in return for media, marketing services, brand, and other rights provided by ESPN. The new sportsbook is expected to launch during the upcoming football season.
ESPN BET signifies a new era in sports betting. By leveraging ESPN's industry-leading multi-platform reach and PENN Entertainment's rising product operations and expertise, ESPN BET is set to become ESPN's exclusive sportsbook.
This partnership will allow PENN Entertainment to receive odds attribution, promotional services inclusive of digital product integrations, traditional media, and content integrations, and access to ESPN talent, among other services that collectively generate maximum fan awareness of ESPN BET.
The new sportsbook aims to serve sports fans by offering betting content and the ability to place bets with less friction within ESPN products.
"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," says Jimmy Pitaro, Chairman, ESPN.
"The strategy here is simple: to give fans what they've been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET."
Jay Snowden, Chief Executive Officer and President of PENN Entertainment, echoed Pitaro's sentiments, expressing his excitement about the agreement.
"This agreement with ESPN and collaboration on ESPN BET allows us to take another step forward as an industry leader. Together, we can utilize each other's strengths to create the type of experience that existing and new bettors will expect from both companies, and we can't wait to get started."
This move represents a significant 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.
In conjunction with the agreement, Penn Entertainment will part ways with Barstool Sports, a brand they took ownership of in 2020. So who is the man stepping in to acquire the brand? None other than its original founder, Dave Portnoy.
The deal is "accompanied by a non-compete clause" e and additional limiting stipulations. Penn will also "receive 50% of the gross proceeds" if there is a subsequent sale of Barstool; however, in a video update, Portnoy expressed that another sale is not in the cards.
Describing the situation as a "win-win," he wished ESPN and Penn well in their future ventures.
He added, "More importantly, for us, for Barstool, for the first time in forever, we don't have to watch what we say, how we talk, what we do. It's back to the pirate ship. By the way, I will never sell Barstool Sports [again], ever. I'll hold it till I die."
ESPN BET is the latest offering from ESPN to meet fan demand for a trusted brand in the sports betting space. The ESPN BET brand will be home to ESPN's sports betting content across platforms.
This strategic partnership between ESPN and PENN Entertainment represents a significant step forward in the sports betting industry, offering fans an enhanced, seamless betting experience.
The launch of ESPN BET is a testament to the rapidly evolving landscape of the sports betting industry. This strategic collaboration between ESPN and PENN Entertainment sets a new standard for sportsbooks, promising to deliver an unmatched user experience for sports betting enthusiasts across the United States.