This is not a typical media sportsbook commercial agreement. This is an exclusive and comprehensive alliance that will redefine the sports betting landscape Penn Entertainment and ESPN will look for “creative ways” to get their new ESPN Bet sportsbook into the Connecticut and New York sports betting markets.
That’s according to Penn CEO and President Jay Snowden, who hinted at obtaining market access in both states through more unconventional means.
But Snowden also made it plain that ESPN Bet will have a much easier time getting into those two states and others after Penn rebrands its struggling Barstool Sportsbook as the more-promising ESPN Bet sometime this fall.
“I think going in with ESPN Bet [versus Barstool Sportsbook] sets you up to get access pretty much anywhere,” Snowden said during an earnings call to discuss Q2 2023 on Tuesday.
The rebrand is at the center of a $1.5 billion strategic alliance announced Monday between Penn and ESPN.
“This is not a typical media sportsbook commercial agreement,” Snowden added. “This is an exclusive and comprehensive alliance that will redefine the sports betting landscape with a highly aligned partner that long term, like us, wants ESPN Bet at the top.”
“Where There’s A Will…”
For ESPN Bet, deployment in both states makes perfect business sense.
New York is by far the largest regulated market for sports betting in North America, so Penn and ESPN would naturally want their new creation to be operational there. And while neighboring Connecticut is a much smaller market, it is also ESPN’s home — the network has its headquarters in Bristol.
Snowden sounded optimistic about ESPN Bet’s odds of launching there — although he was vague about how that could be achieved in short order.
“Now, in some states, there’s limited licenses and things of that nature,” the Penn CEO said. “But where there’s a will, there’s a way, and there’s creative ways to get into some of the states that we’re not currently in.
“That’s something that’s a high priority for both us and ESPN — we’ll continue to make that a high priority.”
Could ESPN Bet Launch in its Home State?
Connecticut could be the easier of the two states for ESPN Bet to get into.
Last April, the Connecticut Lottery Corporation (CLC) issued a request for proposals (RFP) for a new sports betting operator after Rush Street Interactive (RSI) announced in late March that it would end its partnership, it first agreed to in August 2021.
The CLC is reportedly close to signing a new partner. If that’s true, Penn and ESPN may have to wait until:
- The CLC needs to find a third partner for sports betting, or
- Either DraftKings or FanDuel end their partnership with a pair of tribal casinos in the state, or
- State lawmakers change existing gaming laws to allow more sportsbooks to launch
Snowden said a decision on whether to pursue a partnership with the CLC “hasn’t been made yet.
“We obviously would like to be in Connecticut. We’ll see when that decision is made and if we’re fortunate to be a new operator in Connecticut.”
Whichever operator is the winning bidder of the RFP, it will have immediate access to nine retail sportsbook locations previously run under RSI’s SugarHouse brand. A tenth retail location at the XL Center in Hartford is scheduled to open on September 1.
The CLC is authorized to have up to 15 retail sports betting locations, but none are allowed within 25 miles of tribal land.
DraftKings Sportsbook has a partnership with the Mashantucket Pequot Tribal Nation, which owns and operates Foxwoods Resort Casino. Meanwhile, FanDuel Sportsbook is partnered with the Mohegan Tribe, which owns and operates Mohegan Sun Casino.
RSI deployed its SugarHouse brand in Connecticut, instead of its more well-known BetRivers Sports brand, due to a state law that prohibits naming a sportsbook after a retail casino brand.
New York Launch Also Coveted
Snowden was equally vague about how ESPN Bet could break into the Big Apple.
Barstool was not among the nine mobile sportsbooks chosen by New York regulators back in November 2021. But NY lawmakers have recently considered expanding the number of sportsbook licenses and said applicants that weren’t picked last time are automatically eligible to reapply.
“No one loves the [51%] tax rate in New York, but there could be opportunities in the short- or medium-term to get access to New York creatively,” Snowden said. “And those are things that we’re working on behind the scenes. It’s really important to be a scale player to have access to the states that matter.”
Rumors have persisted since late 2021 that Barstool was denied a license in New York because of issues with the brand in other states — especially following illegal promotional activities near college campuses in Ohio and Tennessee.
“We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” Barstool founder Dave Portnoy said Tuesday on X, the social media platform formerly known as Twitter.
“Every time we did something, it was one step forward, two steps back. We got denied [sports betting] licenses because of me. So, the regulated industry [is] probably not the best place for Barstool Sports and the type of content we make.”