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LEARN MOREPosted: 7:56 a.m. EDT Aug 9, 2023
PENN Entertainment announced it formed a partnership with ESPN to create the ESPN Bet app this fall as legalized sports gambling continues to expand throughout the U.S.
An announcement like this was once relatively unthinkable as leagues and their broadcast partners generally shied away from sports betting until recent years. Their stance has changed significantly as 34 states now have legal sports betting, with four more to legalize sportsbooks soon.
PENN said it will make $1.5 billion in cash payments to ESPN throughout the next 10 years. With the announcement, PENN said it is divesting Barstool Sports to founder David Portnoy. PENN's agreement with Portnoy requires certain non-compete restrictions. Penn also can claim 50% of gross proceeds in "any subsequent sale or other monetization event of Barstool."
The new app will be seen prominently on ESPN platforms and will include content from ESPN talent, PENN said.
"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," said Jay Snowden, CEO of PENN. "ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem."
ESPN currently has broadcast agreements with the NHL, NBA, MLB and NFL. It also carries many top college football and basketball games, including the College Football Playoff.
"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," said Jimmy Pitaro, chairman of ESPN. "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."
From January through May, sports betting in the U.S. increased 64.9% compared to the same period of 2022, according to the American Gaming Association.
