After previously expressing interest in joining New York’s gambling scene, Penn Entertainment has finally found its entry to the Empire State. This week, the operator of ESPN Bet revealed it has paid around US$25 million to Wynn Resorts to acquire its mobile sports betting license for the Empire State. It was the same amount Wynn paid for the license in 2021, prior market launch.
New York’s online sports betting is one of the industry’s leaders, despite launching just over two years ago in January 2022. However, the state opted for a limited model allowing only nine operators to legally offer and accept digital wagers on sports. Penn had an interest in the market before launch, but it was never approved by the state and it has found a way.
Gaining Entry to the Empire State
On Tuesday, February 13, 2024, Penn Entertainment reported that it has an agreement in place with Wynn Resorts to pay it US$25 million, which is the same amount Wynn paid the state to join the market. For just over two years now, New York has handled over US$35.7 billion in online sports wagers, outperforming every other legal mobile sports betting market in the U.S.
When the licenses were awarded a few years ago, there were rumours that Penn was not selected for a license for its Barstool Sportsbooks after a controversy with the founder of the sportsbook, Dave Portnoy. But these rumours were never confirmed by the New York State Gaming Commission or the company. But in 2023, Penn sold the brand back to Portnoy after initially buying it for US$551 million.
Its new ESPN Bet platform debuted in November 2023 and was available in 17 states and had approximately 2% market share. However, numbers improved quickly, as it captured a 7.4% market share in Pennsylvania in November, which was more than the 3.7% from October. However, it will be difficult to establish in New York, as FanDuel and DraftKings dominate the market.
Meanwhile, Bank of America analyst, Shaun Kelley, said that the app could be a surprise beneficiary of Taylor Swift fans who watched the Super Bowl due to her relationship with Kansas City Chiefs’ Travis Kelce. But in New York, local regulators must sign off the license transfer to Penn, hence allowing ESPN Bet to launch and possibly provide some serious competition to the market leaders.
Marking the Second Anniversary
As mentioned, in January 2024, New York celebrated two years since the official opening of the mobile sports betting sector. In the second year, Gov. Kathy Hochul disclosed tax revenue of US$862 million, which will be invested in education, youth sports, and tackling problem gambling. Since January 2022, the market has now provided over US$1.75B in tax revenue.
However, some lawmakers were disappointed to see the governor pass on a possible iGaming expansion. Last month, she 2024 executive budget and left out online casinos from the plans. Sen. Joseph Addabbo is one the biggest proponents of the expansion, and he chose to remain optimistic saying the latest development does not necessarily mean that the push for online casinos is over
Source: Brewer, Contessa “ESPN Bet plans launch in New York, the largest U.S. betting market” CNBC, February 13, 2024
