Digital Wager Wire highlights the most important events impacting the domestic and international sports betting and gaming industry each week throughout the year.
Proxy Battle for ESPN Bet Parent Company
Penn Entertainment’s investors are unhappy as the land-based casino company’s journey into the tumultuous mobile sports betting waters has been disappointing, to say the least. HG Vora, a capital management firm with a stake in Penn, has been among the most outspoken and has nominated three directors for independent board seats on the troubled company.
A Push for Change
The investment firm believes that bringing in experienced industry professionals will be a positive step in righting the listing ship and has nominated former Pinnacle Entertainment CFO Carlos Ruisanchez, former Superbet Group CEO Johnny Hartnett, and former Penn CFO William J. Clifford to the three board seats.
HG Vora called Penn’s online gaming decisions an “abject failure” and cited “reckless spending of nearly $4 billion” on partnerships and “overpaying, overpromising, and not delivering” as the primary reasons for shifting course.
A Costly Shift
Penn Entertainment’s CEO Jay Snowden spent approximately $650 million to buy sports media empire Barstool Sports and used the company’s influence with their young male demographic to form Barstool Sportsbook.
However, six months after completing the sale, Snowden was smitten with the idea of aligning with ESPN and spent $1.5 billion on a 10-year deal with the Worldwide Leader in Sports. Yet, a caveat to the deal was divesting itself of the entity it had just purchased, and Snowden subsequently sold Barstool Sports back to its founder, Dave “El President” Portnoy, for $1 and 50% of the profits should Portnoy sell Barstool at a future date.
Penn subsequently dissolved Barstool Sportsbook and replaced it with ESPN Bet, which captured only 3% of the market during the 2024 NFL season. Snowden believes that greater integration with ESPN’s app and media platform will begin to pay dividends.
Penn’s CEO was asked about his goals of developing ESPN Bet as a market leader and said, “While that opportunity and strategy are very much intact, we haven’t met this one yet. We believe that’s about to change.”
Missouri Sports Betting Delayed
An old foe of sports betting in Missouri has imposed his will again and has seen to it that sports betting in Missouri will not be fast-tracked before the lucrative NFL and college football seasons. As a state senator, Denny Hoskins continually derailed efforts to legislate sports betting in Missouri unless it was tied to legalizing, regulating, and licensing video lottery terminals (VLTs), also known as gray machines.
However, the professional sports franchises in the Show Me State decided to create a political action committee (PAC), Winning for Missouri Education, that campaigned vigorously for its approval. Ultimately, the gridlocked Missouri legislature was circumvented by getting 180,000 certified signatures of Missouri residents in support of sports betting, which resulted in it appearing on November’s ballot as a referendum question.
Missourians voted in favor by a narrow margin, but a majority nonetheless, and the deadline for launching sports betting is December 1, 2025. However, if emergency rules were adopted, it would have expedited the process to as early as June 1st, 2025.
According to Missouri law, emergency rules are written to eliminate any “immediate danger to public health, safety, or welfare” or to “preserve a compelling governmental interest that requires an early effective date.”
The Secretary of State ultimately decides if emergency rules should apply, but Missouri sports betting’s old foe said no, as Denny Hoskins, forced to vacate his Senate seat due to term limits, was sworn in as the new Secretary of State in January. Needless to say, Hoskins did not agree with the need to launch Missouri’s sports betting industry early.
Hoskins stated, “The standard rulemaking process is more than capable of achieving the desired outcome within the necessary time frame. In fact, under the proper procedure, the proposed rules could be effective by Sept. 30, 2025—well ahead of the December 1 deadline. This confirms that there is no legitimate justification for bypassing the standard rulemaking process, which is designed to give the public the chance to weigh in on decisions that affect them.”
