ESPN Bet can finally launch in the NY sports betting market, nearly a month after Penn CEO Jay Snowden told investors it would.
The New York State Gaming Commission approved ESPN Bet’s New York sports betting license on Monday, allowing the operator to launch as soon as it can.
“We do have a couple boxes to check and make sure that we are right from a technology standpoint and ready, but we would be prepared to launch in the matter of several days, perhaps even a soft-launch in advance of the weekend,” Penn Executive VP Chris Rogers told the NYSGC.
Penn’s stock closed down 2.8% to $19.51 on Monday.
NY sports betting timeline
Snowden told investors during earnings in early August the company planned to launch ESPN Bet in New York ahead of football season.
“Is it fair to assume that when you close the New York license for sports betting, the online product will be essentially ready to go the next day?” Jordan Bender, a senior equity research analyst at Citizens JMP, asked Snowden on the call.
“That’s correct,” Snowden said. “Yes. You should assume that we’re live in New York before college football week one, which is the end of this month.”
Delayed NY sports betting launch
The delay in ESPN Bet’s launch stemmed from the transition of the NY sports betting license Penn purchased from WynnBet in February. Penn finished submitting the required paperwork to the regulator in August but there was no specific deadline or official date of application, NYSGC Executive Director Lee Park told LSR.
“We’re grateful to the New York State Gaming Commission for its approval and we’re in the process of readying our product for launch in New York in the coming days,” a Penn spokesperson said in a statement.
Penn will miss out on at least the first three weeks of NFL betting in New York, and perhaps more, at a critical time when activist investors are calling for a sale. Penn’s year-end guidance of $125 million in EBITDA losses at the guidance midpoint included a full season of NFL betting in New York.
College sports, underage advertising
Commissioners questioned Rogers on ESPN Bet’s presence on college campuses, during ESPN college sports coverage and in advertising towards underage groups.
“We take it very seriously, not targeting college students in our marketing efforts,” Rogers said. “There’s obviously discussion around betting at sporting events that’s part of the editorial, and from the ESPN perspective, I think that’s going to increase engagement from the audience who’s interested in betting.
“There are restrictions around promotion of sports betting in college athletics, both from a conference and coverage standpoint and so our commitment is to make sure we adhere to those standards.”
Penn encountered similar questions during Massachusetts’ approval process several years ago when commissioners took issue with the Barstool College Football Show hosted at the University of Tennessee.
No Portnoy, no problem?
When Penn sold Barstool back to Dave Portnoy for $1, Portnoy took to social media, claiming he was the reason Penn had been denied sports betting licenses in the past.
New York is the only state to formally reject Penn an online sports betting license. In 2022, Barstool Sportsbook failed to meet the state’s qualifications for approval. Around the same time, Snowden expressed strong reservations about entering the New York market, calling the state’s 51% tax rate a “margin-killer.”
Since moving to ESPN Bet, Snowden has described New York as an opportunity to demonstrate how ESPN’s branding power can keep costs down.
