PENN Entertainment CEO Jay Snowden said today that will launch in 16 states by the middle of the NFL season, certainly before Thanksgiving, and the new deal will allow PENN to expand its offerings into other states that balked at their previous Barstool Sports partnership.
Snowden during a PENN Entertainment Q2 2023 earnings call today that a 5% sports betting market share would no longer be acceptable and the company is planning an increased promotional spend to meet expectations. The push will begin in the initial 16 states PENN is licensed for sports betting after their regulatory bodies approve the rebrand and partnership.
But will a rebranding be as easy as expected? What regulatory hurdles will ESPN, PENN Entertainment, and ESPN BET face as it moves towards an NFL launch? There are many unknowns about the brand and the expected moves closer to its November debut.
Where Will ESPN BET Debut?
PENN Entertainment is currently licensed to operate sports betting in 16 states throughout the country. These are as follows:
Arizona
Colorado
Illinois
Indiana
Kansas
Louisiana
Maryland
Massachusetts
Michigan
New Jersey
Pennsylvania
Tennessee
Virginia
West Virginia
While Snowden thanked Barstool Sports for their three-year partnership with PENN, he did reveal that the new deal with ESPN would allow additional licensure in states that were wary of the Barstool Sportsbook brand.
Barstool Sports Founder Dave Portnoy revealed as much in an emergency press conference he posted on X yesterday.
Emergency Press Conference I Bought Back Barstool Sports
Dave Portnoy (@stoolpresidente)
We underestimated just how tough it is for myself and Barstool to operate in a regulated world…We got denied licenses because of me. You name it. So the regulated industry is probably not the best place for Barstool Sports, he said.
So where will PENN look next for sports betting licensure? The PENN Entertainment CEO today specifically pointed out New York as a possibility, with opportunities in the short- or medium-term to gain licensure. While Snowden did say that nobody is making money in New York, it s important for a scale player to have access to the states that matter.
Upcoming sports betting markets such as Kentucky, Vermont, and North Carolina are also assuredly on PENN Entertainment s radar for ESPN BET licensure.
What Regulatory Hurdles could PENN, ESPN Face?
Sports betting regulations are complicated, dense, and could include significant hurdles for PENN Entertainment and ESPN BET prior to launch.
The Massachusetts Gaming Commission, for example, focused extensively on Barstool Sports and its apparent promotion of sports betting to an underage audience when considering sports betting licensure for PENN and Barstool Sportsbook. The commissioners pointed to an incident in Ohio where Barstool Sports was fined $250,000 by the Ohio Casino Control Commission for violating an Ohio prohibition on advertising targeting a college campus and/or individuals under the age of 21.
The violation, sent to Penn Sports Interactive as part of its Barstool Sportsbook brand, stemmed from a Nov. 15, 2022, Barstool College Football show which took place “on, or targeting the area of, the University of Toledo’s Campus.” During the show, the violation notice alleges that Barstool advertised the Barstool Sportsbook by promoting pre-registration for the sportsbook, including bonus cash and “mycash” rewards for PENN Entertainment casinos. It also said Barstool targeted individuals under the age of 21 in the same way during the show.
Barstool and PENN Entertainment agreed to take specific measures moving forward that only individuals 21 years of age or older attend any Barstool Sports College Football shows as a condition of its licensure.
ESPN College Gameday, a popular national college football television show, is a live event that typically broadcasts from a college campus. Students flock to the tapings, many over 21. Will ESPN, ESPN BET, and PENN Entertainment be beholden to the same national restrictions moving forward as part of their licensure?
ESPN College Gameday is a massive show, far bigger than the Barstool College Football show that came under question. Will the MGC deny ESPN BET a license if ESPN doesn t restrict students younger than 21 from attending one of the shows?
It will be interesting to see how PENN Entertainment and ESPN successfully navigate each state s unique regulations moving forward into the fall.
