Truist: Penn ‘Active In Discussions’ For ESPN Bet NY License

Written By

Updated on


Penn Entertainment is actively working to buy a New York sports betting license for ESPN Bet.

That is according to Truist, which hosted 16 gaming operators at the 11th Annual Truist Securities GLLR Summit in Boston last week. A Penn spokesman declined to comment when reached by LSR.

ESPN Bet remained the “topic du jour” when it came to digital, analyst Barry Jonas wrote in his recap of the event. The brand only launched Nov. 14 but management so far is pleased, with more than 2 million downloads and a 4.9 out of 5.0 on more than 90,000 ratings.

Enhancements are coming that should put the app at the industry-standard sometime in the first quarter, management said. That includes Bet Mode, which will allow bets to be placed directly from the ESPN media app.

ESPN Bet wants into Big Apple

Penn management believes ESPN Bet will be the sportsbook of the mass-market customer and operating in New York is imperative. CEO Jay Snowden said the company was working on New York access when it announced its Disney partnership in August.

That is a significant shift in strategy from Snowden’s comments in November 2021, when he said no one could make money in New York.

“So I’ve always struggled with the ‘Would you rather be in or not?’ I think, objectively speaking, you’d probably rather be in than not be in, but it’s one of those states where if you’re not in you’re not crushed by that either. Maybe from a TAM perspective and a revenue perspective but I think it’s just going to be a margin killer. I think it’s going to be an EBITDA detractor.”

Penn previously partnered its Barstool Sportsbook brand with the Fanatics Sportsbook brand in a failed NY sports betting bid that did not score highly enough to be considered when the market first launched online wagering.

Path ESPN Bet to NY possible

There are a few suitors who could be willing to part with their New York sports betting license at this point. The 2021 bid only authorized nine operators, so no additional licenses are available without the legislature approving more.

OperatorHandleHandle ShareRevenueRevenue Share
Resorts World Bet$61,765,9120.4%$4,146,5070.4%
Bally Bet$14,881,7530.1%$814,0050.1%

The top six operators can likely be ignored when considering a seller to Penn. They have all begun to hit the scale needed for profitability, including BetRivers turning a profit in its sportsbook-only markets in the third quarter.

Fanatics is unlikely to give up its recently obtained license through its acquisition of PointsBet.

Bottom three are possibilities

That leaves WynnBet, Resorts World Bet and Bally Bet as potential sellers.

Resorts World Bet feels like an easy pick since it is a one-state operation, but the brand is expanding into New Jersey. That makes a sale seem unlikely.

Bally Bet switched from proprietary technology to Kambi‘s platform in a cost-savings move. Selling the New York license would help return some of those sunk funds from its previous purchases.

WynnBet, though, seems like a possible choice. It shut down operations in many states recently and, while New York was not one of them, WynnBet only guaranteed that Massachusetts and Nevada will stay open moving forward.

Other takeaways from Truist Summit

There were a number of other sports betting-related details that Jonas and his team called out in the recap: