ESPN Bet will launch in 17 states today, marking the worldwide leader in sports’ first step into the US’s growing online betting market. The sportsbook will be operated by Penn Entertainment, which secured ESPN brand licensing for as much as $2 billion earlier this year, divesting totally from Barstool Sports in pursuit of the new relationship. Customer data and gambling licenses secured by Penn will be migrated from Barstool Sportsbook to ESPN Bet, giving the new entrant an established base of users to build on. Several ESPN social media accounts with more than 10 million followers have been transitioned into ESPN Bet channels.
ESPN’s name recognition and television presence cannot be overstated in the sports world. However, the Disney-owned media giant’s deal with Penn did not require the former to cease the sale of lucrative advertising spots to Penn’s competitors like DraftKings and FanDuel. Those two sportsbooks currently dominate the US sports betting landscape, controlling nearly three quarters of the online market.
Related ETF and Stocks: Roundhill Sports Betting & iGaming ETF (BETZ), PENN Entertainment, Inc. (PENN), The Walt Disney Company (DIS)
With the US now knee-deep in the NFL football season, ESPN will launch its long-awaited sportsbook today. The Disney-owned brand signed a groundbreaking 10-year deal worth up to $2 billion with Penn Entertainment in August, launching a joint venture titled ESPN Bet. Penn will operate the sportsbook, paying ESPN roughly $1.5 billion per year in licensing fees, and ESPN will be granted rights to purchase as much as $500 million in Penn stock.
Penn’s licensing of the ESPN brand ended a long-standing arrangement the brand had with social media powerhouse Barstool Sports. Penn acquired a 36% stake in Barstool back in 2020 for $163 million, a deal that would help the brick-and-mortar casino company break into the online sports betting framework and attract young audiences. Penn would go on to become the sole shareholder in early 2023 before making a U-turn on the Barstool brand, which was sold back to founder Dave Portnoy for just $1.00, as well as 50% of the proceeds of any future liquidation event or dividend. Penn is expected to record a loss of up to -$850 million on the transaction.
Despite being an extremely popular on social media platforms, Portnoy’s controversial persona was an apparent liability for Penn’s sportsbook business. Portnoy himself admitted in the aftermath of the Penn divestiture that Penn was…
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