The US online gambling industry is one that has seen massive growth in the past five years. ESPN is the latest company that wants to be part of this expanding industry. A $2 billion deal has been signed with PENN Entertainment and ESPN BET is on its way.
It’s not surprising that major companies are showing interest in the US online gambling business. There are hundreds of millions of dollars being earned by those companies running online casinos and sports betting sites. This is delighting the states that have made it legal to gamble as they receive huge amounts of gambling tax revenue.
ESPN is the world’s leading sports entertainment multi-platform brand. With that being the case, they now don’t just want people to be watching their hours of sports coverage but also betting on who will win. In addition to being able to place bets on major sporting events, players will also be able to play their favorite casino games. That’ll give players something to do during the half-time break.
When looking to expand into another industry, it’s important to team up with a company that has expert knowledge. Recent years have seen US gambling businesses go into partnership with UK bookmakers such as bet365 and Entain to use their expertise when launching their own sportsbooks. Caesars Entertainment partnered with UK site William Hill and eventually bought the company.
PENN Entertainment certainly fits the bill when looking for a business partner. They are the leading provider in North America of not just sports content but also casino games. Although the US gambling industry is a highly competitive one, the combination of ESPN and PENN Entertainment looks like one that can only enjoy great success.
It’s something that might not have been considered before a US Supreme Court Judge ruling in 2018. That created a situation where it was now the individual US state that could decide whether or not to make gambling on sports legal rather than the mainly reluctant Federal Government.
Soon after the ruling was made, states such as New Jersey and Delaware made sports betting legal. Now over 30 US states have followed suit and players aren’t just betting on sports but spending time at legal in the USA online casinos such as betMGM or the newly launched site Caesars Palace. More states are expected to change their gambling laws in the future leading to even more expansion and higher revenues.
The deal is believed to see ESPN receive $1.5 billion from PENN over the next ten years. They will also grant warrants to the operator to buy a total of 31.8 million shares in PENN Entertainment worth $500 million.
This fall will see PENN Entertainment’s current sportsbook be rebranded. Its new name will be ESPN BET and be available throughout North America. At present, they are licensed to operate in 16 US states.
Recently PENN Entertainment sold its affiliated sportsbook Barstool Sports. It was sold to its former owner Dave Portnoy who now owns 100% of the company.
News of the deal with ESPN has been good news for their shareholders with the share price initially going up by 18% on 8 August after the deal was announced. However, that didn’t last and the following week their share price was below the level before the news broke.
It’s been reported that ESPN BET will be the operator’s executive wagering facility. There will be many benefits for PENN Entertainment such as promotional services, media and content integrations, and odds attribution.
Responsible gambling is important whether you are betting on an NFL match or trying to win at blackjack. PENN Entertainment has introduced responsible gambling programs and these will be part of ESPN BET. They will be used to educate players on how to gamble responsibly
The Chairman of ESPN is Jimmy Pitaro and he believes the deal will give fans just what they want. He said that their “primary focus” is always “to serve sports fans.” The company has recognized that those fans want to be able to place bets on sports. PENN Entertainment is in Mr Pitaro’s opinion “the perfect partner to build an unmatched user experience for sports betting with ESPN BET.”
PENN Entertainment is also delighted with the deal. Their Chief Executive Officer and President Jay Snowden believes it allows them to “take another step forward as an industry leader.” By utilizing the strengths of each company ESPN BET can be a massive success. He said “we can’t wait to get started.”