PENN Entertainment Secures Wynn Interactive’s New York Sports Betting License for ESPN Bet Expansion

Strategic Move to Expand ESPN Bet in New York

PENN Entertainment’s acquisition of Wynn Interactive’s New York license is a critical step in expanding ESPN Bet, which first debuted in November 2022 after rebranding from Barstool Sportsbook.

The move into New York is part of PENN’s broader strategy to grow its sports betting presence, having already established ESPN Bet in 17 other states, including Arizona, Colorado, Michigan, and New Jersey.

The launch in New York will allow ESPN Bet to compete in one of the most lucrative sports betting markets in the country.

Wynn had previously operated its WynnBet brand in the state but chose to exit the market, creating an opportunity for PENN to secure the license.

During the NYSGC hearing, PENN executives expressed confidence that ESPN Bet will be ready to start accepting bets within days of the approval.

Responsible Marketing and Operational Commitments

Chris Rogers, Executive VP of Chief Strategy and Legal Officer at PENN, addressed the NYSGC’s concerns about marketing to vulnerable populations, particularly college students.

Rogers assured the commission that ESPN Bet takes responsible marketing seriously, and while the operator will feature college sports as part of ESPN’s broader content, the platform is committed to not targeting students directly in its promotions.

Financial Performance and Future Prospects

Despite the approval in New York, PENN Entertainment faces ongoing challenges in the competitive online sports betting market.

In Q1, the company reported $1.6 billion in revenue, a 3.6% year-over-year decrease. Its Interactive division, which includes ESPN Bet, posted $207.7 million in revenue but suffered a significant adjusted EBITDA loss of $196 million.

This highlights the intense competition in the sector and the difficulty operators face in achieving profitability.

However, PENN views ESPN Bet’s expansion into New York as a major growth opportunity that could help stabilize its financial outlook.

New York, as the largest sports betting market in the US, provides access to a vast customer base, potentially boosting revenue and market share.

ESPN Bet’s Background and the Barstool Acquisition

ESPN Bet’s launch followed PENN Entertainment’s decision to rebrand its Barstool Sportsbook, part of a broader strategy to integrate sports betting with media content.

The transition to ESPN Bet occurred after PENN’s acquisition of Barstool Sports.

In 2020, PENN acquired a 36% stake in Barstool for $163 million, later purchasing the remaining 64% in 2023 for $388 million.

This acquisition allowed PENN to leverage Barstool’s dedicated following and brand recognition to fuel its growth in the sports betting industry.