Penn National Gaming Wants Another Media Partner For Online Sportsbook

Written By

Updated on

Penn National

Penn National knows it doesn’t have an in-house sports brand to launch an online sportsbook in the 19 states where it operates.

But the regional casino operator knows it has an opportunity.

The best way to fix what it doesn’t have – a strong sports brand – would be to partner with another sports media company, future CEO and current Chief Operating Officer Jay Snowden said on the company’s third-quarter earnings call.

“We do envision having partners, potentially, that we will be thinking about how we can engage with their customers who are sports enthusiasts at this point,” he said. “And then of course, once they become part of our sports betting database, [we’ll] introduce them to our casino product as well.”

Who might the next partner be?

Penn National continues to have conversations with a number of potential sports media partners, Snowden said. He characterized the direction of those talks as encouraging.

The plan benefits Penn National in two ways. The casino operator can get a strong sports brand without creating it organically and also acquire a database of potential customers.

The company has been studying the media deals other casino operators have signed and doesn’t just want to sign a flashy advertising deal. The preferred route would include a fully integrated brand and sportsbook experience, Snowden said.

“In an ideal scenario, you have aligned incentives and mutual skin in the game to drive long-term success,” he added.

Penn National already has one deal in place with sports media company theScore. The company gave its mobile sportsbook, theScore Bet, market access to multiple states earlier this year.

Sportsbooks working as acquisition tool

Penn National’s sportsbooks are working as expected at its regional casinos, the company confirmed on its Q3 call.

Sports betting is beneficial to casino operators as a way to acquire new customers. Penn National’s sportsbooks have done just that.

The additional customers in the sports betting demographic – which skews younger and male – have been complementary and incremental to the profile of the vast majority of customers already in the company’s database, Snowden said.

They come with cash

Those new customers are spending too. Table game revenue at casinos with retail books is up an average of 15% compared to the prior year, Snowden said.

Food and beverage covers and revenue have also been positively affected. Most of the food and table revenue growth is driven by new and reactivated customers, Snowden added.

Handle and revenue at Charles Town’s sportsbook are both up more than 50% in the first two months of football season compared to last year. The West Virginia casino draws customers from the Washington, DC market, as downtown DC is about 60 miles away.

Current Penn National partners

Penn National’s signed a contract this summer with Kambi to handle its retail sportsbook operations.

The company also chose four mobile sportsbook operators for the other sports betting skins available through its casino licenses in its 19 states. The agreements are pending legalization of sports betting in some states. They also depend on whether there will be enough skins available in the regulations.

The agreements are all based on a revenue share model. Penn National maintained the primary skin in each state.

Breaking it all down

DraftKings SportsBook gets access to seven states. The agreement is for 10 years and can be extended for 10 more. DraftKings will soft launch in Pennsylvania Monday based on the agreement.

PointsBet gets access to five states. The agreement is for 20 years with an additional $2.5 million access fee for Ohio. Penn National also took a 5.28% stake in PointsBet. PointsBet announced it is raising cash to enter new states.

theScore Bet gets access to 11 states. The agreement is for 20 years. Penn National also took a 4.7% stake in theScore.

The Stars Group gets access to nine states with its Fox Bet sportsbook. The agreement is for 20 years with an additional $12.5 million paid up front, an additional $5 million access fee for Texas and a net gaming revenue bonus in 2023.