ESPN BET’s arrival in the New York sports betting marketplace arrived three weeks later than the company would have liked but after a soft launch on Thursday, the highly-anticipated app went live to all New Yorkers the following day.
Better Late Than Never
Penn Entertainment has put a tremendous amount of time and financial resources into creating ESPN BET since it rolled out in 17 states back in November 2023. But gaining access to the lucrative, albeit highly taxed (51%), New York market was a primary objective entering 2024. And in February, ESPN BET found its connection when it acquired Wynn Interactive Holdings’ New York licenses after its WynnBET shuttered operations in February.
Jay Snowden, PENN Entertainment CEO, and President, said at the time, “This is an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America. Together with ESPN, we’re building a brand that is synonymous with sports betting, and operating in the New York market is key as we grow ESPN BET across the U.S.”
The timing was thought to be ideal as it would have plenty of time to gain regulatory approval before the NFL kicked off its 2024 campaign. However, things did not go quite as planned, and much was taken for granted. While Week 1 of the NFL season was underway, news surfaced that the New York State Gaming Commission (NYSGC) had yet to discuss the application but it was on the board’s agenda for later in the month.
“We believe the item will be on the agenda for the next Commission meeting, which is scheduled for September 23, 2024,” Brad Maione, director of communications for the NYSGC, wrote in an email.
And on Friday, ESPN BET executed its full launch in the Empire State, just in time for college football Saturday and Week 4 of the NFL. Going live after the season has already commenced is not ideal but it is better late than never.
🚨 New York, we’re officially LIVE in the Empire State. 🗽
Download @ESPNBET now! pic.twitter.com/zkHhVd7r2a— ESPN BET (@ESPNBET) September 27, 2024
Penn’s Gamble Yet to Pay Dividends
Penn Entertainment has its roots deeply embedded in land-based casinos. Only in 2021 and under current CEO Jay Snowden’s tenure has the company aggressively entered the mobile sports betting realm despite the landscape being dominated by the duopoly of FanDuel and DraftKings.
The initial foray began with a stake in Dave Portnoy’s Barstool Sports brand that Snowden wanted to use as a challenger in the mobile sports betting market. The conventional wisdom was that the Barstool Sports demo was comprised of young adult males who like to gamble. Owning a media brand that could become a 24/7 marketing tool for the newly-created Barstool Sportsbook seemed like the perfect symbiotic relationship.
That plan unfolded and Barstool Sportsbook was born, with Snowden completing the $550 million purchase in March 2023. However, it was not approved for a New York sports betting license, which sparked the following commentary from Snowden.
“When you keep in mind that the 50% tax is in addition to a really high license fee as well as that 50% tax is on gross, pre-promo spend, not net, I don’t think anybody’s going to make money operator-wise. The state’s going to make money. I don’t think a single operator will make money in New York.”
But in August 2023 ESPN sent signals that it was willing to lend its name for the right price. Snowden immediately made a deal that allowed the formation of ESPN BET for $1.5 billion over 10 years and the promise to divest itself of the Barstool brand.
Now Snowden has his current mobile sports betting brand in the same market he disavowed only three years ago and is desperately hoping the gamble pays off.
