PENN Entertainment Ditching Barstool; Joining ESPN
The sports betting world received a major shakeup on Tuesday as PENN Entertainment and ESPN announced that they were forming a partnership. This deal will lead to the launch of ESPN BET, and it’s expected to join the sports betting industry later this fall.
ESPN BET will take the place of Barstool Sportsbook, and that change could happen in every state in which PENN already has a license. This is a 10-year deal worth $1.5 billion, and it is going to change the way that the sports betting market is broken up.
Through this deal, ESPN will be eligible to purchase more than 31 million stocks in PENN Entertainment, and there are incentives in the deal that could unlock more common shares.
It was rumored back in October that ESPN had found a sports betting partner, but many assumed that the partner would be DraftKings. Every year seems to have a major deal that changes the sports betting industry, and this appears to be that deal in 2023.
Finally ESPN in Sports Betting
For some reason, ESPN was very slow to get into the sports betting industry, and many were questioning why that strategy was being employed. ESPN has been showing betting odds on it’s digital and television content for the last few years, but they have ever capitalized on this growing industry.
There is actually a deal in place with Caesars Sportsbook currently, but ESPN was not allowed to offer its own sports betting. It’s been more than five years since the growth of sports betting really started, and ESPN has always been monitoring the situation.
It’s unclear when ESPN BET will launch, but both parties in this partnership would love to have this happen at some point during the 2023 NFL season. Because PENN previously purchased theScore Bet, the ESPN BET app will be launched using terrific technology that has never been seen before in this industry.
Barstool Sports Going Back to Basics
This deal seems on the surface to be a big blow to Barstool Sports, but founder Dave Portnoy was celebrating the announcement on Tuesday. Portnoy has grown frustrated by being owned by PENN Entertainment and vows to bring his company back to its roots.
PENN and Barstool initially agreed to a deal back in 2020 that was an exclusive deal for both sports betting and iGaming. Earlier this year, PENN paid Portnoy and Barstool $550 million to officially complete the deal.
Portnoy was able to buy back all of his common stocks through this deal, and PENN will no longer have any control over what Barstool does. PENN will still receive 50% of the revenue if Portnoy sells his company in the future, but that doesn’t seem likely.
The Barstool Sportsbook app struggled to make waves in all of the states in which it was live, and that was part of the reason that PENN wanted to move forward with ESPN.
