ESPN BET has the green light to launch in Massachusetts next week, although regulators want more information about how personalities on the bookmaker's namesake network are allowed to discuss wagering with their audience.
The Massachusetts Gaming Commission (MGC) met Tuesday to review what is a 10-year, $2-billion marketing deal between casino and sportsbook operator PENN Entertainment Inc. and sports-media giant ESPN.
PENN and ESPN are teaming up to launch a new online sportsbook, ESPN BET, and aim to do so on Nov. 14 in 17 states, Massachusetts included.
The MGC, however, believed it had the final say on the brand going live in the commonwealth and wanted to consider whether additional license conditions were needed. PENN was already licensed for online sports betting in the state under the Barstool Sportsbook name, but it is rebranding its wagering business and has sold Barstool Sports back to its founder, Dave Portnoy.
BREAKING: Regulators regulate
In the end, the MGC commissioners did not apply any new restrictions to PENN’s online sports betting license. Instead, the regulators asked for and received guarantees they would receive the final set of guidelines ESPN is preparing for its employees and on-air talent to ensure their journalistic integrity remains intact even as they may be reporting information people are using for wagers on ESPN BET.
Some broad strokes of the policy for those newsbreakers were provided to the MGC, but the policy is expected to be finalized this week, according to Chris Rogers, PENN’s chief strategy officer. The MGC expects PENN to provide a copy of the final guidelines before the commission's Dec. 14 meeting.
“There will be no connection between ESPN insiders, reporters, or the newsdesk with anyone who handles risk or trading for PENN,” Rogers told the commission. “ESPN will continue to report on news as it always has, while PENN will separately and independently manage the sportsbook. PENN will not have access to ESPN’s news-production software.”
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The Massachusetts approval is a key sign-off for ESPN BET. The MGC is one of the stricter regulators in the U.S. and any hiccups could have sent a signal to other states that they needed to look closer at the new online sportsbook. Furthermore, ESPN is based in nearby Connecticut, so Tuesday’s nod from the MGC ensures ESPN BET a presence near Bristol.
Massachusetts may also be the only state that gives ESPN BET such public scrutiny. Rogers said they are not aware of any "meaningful regulatory impediments" elsewhere standing in the way of their rebrand from Barstool Sportsbook to ESPN BET. He added that no concerns have been raised by any other jurisdiction regarding the suitability of PENN or ESPN. The MGC will meet again on Wednesday to approve an update to PENN's house rules.
“We believe we have complied with all Massachusetts gaming laws and regulations to similarly allow the rebranding to occur in the commonwealth on the 14th, pending Wednesday's review of our house rules,” Rogers said.
ESPN and PENN are hoping ESPN BET will carve out significant market share in the U.S. online sports betting scene, which is currently dominated by DraftKings and FanDuel. PENN will run the sportsbook using the same technology that went into Barstool Sportsbook and is used for theScore Bet in Canada. ESPN, meanwhile, will integrate ESPN BET odds into its media offerings and tout the new sportsbook across its television and digital channels.
Still, the MGC voiced a need for more information about ESPN BET during a meeting in October. The regulators were thorough in their evaluation of PENN’s outgoing online sports betting skin, Barstool Sportsbook, and attached certain conditions to its licensure, such as that no one younger than 21 could attend any of Barstool Sports' live college football shows. Rebranding Barstool Sportsbook to ESPN BET did not make those concerns disappear.
“I will hold ESPN to the same standard that I held Barstool during the application process,” commissioner Jordan Maynard said last month. “It's not as easy as just taking one thing off and putting another thing on… arguably, ESPN has more opportunities to host sports shows than Barstool did.”
Some of those concerns lingered on Tuesday, especially now that PENN is associating itself with an even larger media brand.
“How do you keep the reporting, the integrity, the impartiality, the compliance of ESPN separate from ESPN BET in a way that's clear to the average consumer?” commissioner Eileen O’Brien asked.
Everybody's doing it
Rogers noted this is an industry-wide concern, as sportsbook operators are creating content and employing reporters who break news that can move odds and lines. He also provided the commission with a long list of restrictions that both PENN and ESPN will abide by during their partnership.
PENN will be the entity responsible for running the sportsbook and ESPN is essentially a marketing partner. While PENN will oversee the gaming end of the partnership, ESPN will integrate ESPN BET odds into ESPN programming and involve the sportsbook in its editorial offerings.
All advertising for ESPN BET is supposed to include "appropriate" responsible gaming messaging, it cannot target individuals under the age of 21, and must not "glorify" reckless wagering, among other things. Terms such as "risk-free" or "can't lose" will not be used either.
There are specific policies for the promotion of ESPN BET on college campuses. "College GameDay" announcers won’t be touting the sportsbook to their in-person audience, ESPN BET signage will not appear behind those personalities, and any promotion of the brand will not be visible to the people in the crowd.
The finishing touches
PENN employees cannot bet using ESPN BET, but ESPN is not the operator, so the network's employees could continue to wager. Nevertheless, Rogers said ESPN is developing a "comprehensive set" of guidelines for employees and on-air talent to ensure its journalism and PENN’s gambling operations remain separate. That policy is supposed to be finalized this week, Rogers said.
Rogers also said Tuesday that PENN didn’t believe there was any basis to find that the end of its association with Barstool in favor of a new relationship with ESPN would affect the commission’s previous finding of the operator’s suitability.
“Finally, in terms of license conditions and consistent with the commission's action on other sports wagering licenses, we do not believe there's any basis for new conditions and we are comfortable deferring to the commission staff on whether removal of the Barstool conditions on our licenses is required now or at a later date,” Rogers said.
