New York regulator approves $25M ESPN Bet licensing deal

ESPN Bet Approved Sports Betting License Wynn PENN Entertainment
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ESPN Bet owner PENN Entertainment has received favorable news from a New York regulator regarding a multi-million dollar licensing deal.

The New York State Gaming Commission (NYSGC) has unanimously approved PENN’s deal to acquire Wynn Interactive Holding’s online sports betting license in the state. The NYSGC approved the deal after PENN agreed to buy the license for $25 million. Wynn offloaded the license as it shuttered WynnBet’s operations in the state.

The approval for PENN allows the gaming giant to launch ESPN Bet, its online and retail sports betting brand, in New York. PENN debuted ESPN Bet in November 2023 as a rebrand of Barstool Sportsbook. In 2020, PENN purchased a 36% stake in media brand Barstool Sports for $163 million. Three years later, PENN acquired the remaining 64% in a deal valued at roughly $388 million. PENN would later sell Barstool back to its founder for $1.

ESPN Bet initially launched in 17 states, which included Arizona, Colorado, Indiana, Kansas, Michigan and New Jersey. In March, it launched operations in North Carolina.

PENN executives said during the NYSGC hearing that ESPN Bet should be ready to start taking bets in New York within a few days.

Regulator questions ESPN Bet

Commission members addressed concerns regarding ESPN’s relationship with college campuses and how sports betting can impact students, particularly young men. During the college football season, ESPN hosts College GameDay on a different campus each week.

“We take it very seriously about not targeting college students in our marketing efforts and there’s obviously discussions around betting on college sports as part of our editorial,” Executive VP of Chief Strategy and Legal Officer and Secretary Chris Rogers told the NYSGC during a hearing on Monday. “From an ESPN perspective, that is one thing that leads to increased engagement from the audience that already has an interest in betting.”

ESPN Bet believes its presence in New York expands the market and brings new customers.

The operator also considers New York, America’s largest online sports betting market, a promising opportunity and a chance to improve business despite lackluster performances.

ESPN Bet suffers losses

The operator has gained market access in New York despite heavy losses for its owner.

“Reports have come back,” said ESPN personality Pat McAfee in a joking manner during an airing of his TV program earlier this year. “ESPN Bet has a lot of room to grow.”

In Q1 2023, PENN generated $1.6 billion in revenue. The results were a 3.6% decrease year-over-year. Its Interactive business, which includes ESPN Bet, generated $207.7 million in revenue during the quarter but posted an adjusted EBITDA loss of $196 million.