The door to the largest competitive market for online sports betting in the U.S. is now open for ESPN BET.
Members of the New York State Gaming Commission met Monday and approved PENN Entertainment Inc.’s $25-million acquisition of a Wynn Resorts Ltd.-related entity that holds a mobile sports betting license.
Wyomissing, Pa.-based PENN had hoped to launch ESPN BET in New York before the start of the NFL’s regular season, but the debut was delayed because the company had yet to receive the blessing of the Empire State regulator.
Now that the blessing has been received, ESPN BET’s New York launch could be imminent.
“We do have a couple of boxes to check and make sure that we are right from a technology standpoint and ready, but we would be prepared to launch in a matter of several days, perhaps even a soft launch in advance of the weekend,” said Chris Rogers, executive vice president, chief strategy and legal officer at PENN, during Monday’s meeting.
Heads up to NY sports bettors: ESPN BET should be coming to your state in the not-too-distant future. https://t.co/P7SWZacAu7
— Geoff Zochodne (@GeoffZochodne) September 23, 2024
Despite its 51% tax rate, New York is an important market for legal sports betting in the U.S. At the moment, the Empire State offers the largest population of possible bettors in the country besides Florida, which has granted a monopoly over mobile wagering to the Seminole Tribe and its Hard Rock Bet brand.
New York could be crucial for ESPN BET as well, as PENN CEO Jay Snowden said in February the Wynn deal is “an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America.”
PENN has a lot riding on ESPN BET, as it agreed last year to pay $1.5 billion in cash to ESPN over 10 years for the exclusive right to the brand. That is in addition to the money PENN spent on its previous online sports betting brand, the since-shuttered Barstool Sportsbook.
Coming soon
ESPN BET is available in 18 other states but was shut out of New York until Monday’s approval. While Wynn Interactive was one of the winners in the competitive bidding process for a license to offer online New York sports betting in 2021, PENN was not, which is why it needed the deal to go through.
A similar transaction was approved by the NYSGC last year, as the Empire State regulator approved the transfer of a license from PointsBet to Fanatics.
There are eight active operators in New York, and ESPN BET is poised to become the ninth. WynnBET shut down in New York this past summer, which was part of a broader exit by the operator.
“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 told Covers.
Rogers received a few questions from commissioners seeking reassurances that there would be no advertising on college campuses or to underage residents, concerns that are not insignificant given ESPN's broadcasting of numerous college sports. The commissioners received those assurances.
“Our commitment at PENN, in addition to our partners at ESPN, is to make sure that we are in adherence with all requirements related to promotion of sports betting on college campuses,” Rogers said.
Growing the pie
There was also a question about what sort of benefit the New York market would see from the entry of ESPN BET. NYSGC Executive Director Robert Williams noted WynnBET "had not been particularly successful" in the Empire State and they anticipated ESPN BET could fare better.
ESPN BET, which launched in Nov. 2023, generated 1.7% of gross gaming revenue in 11 states in July, New York included, according to a note from Citizens JMP Securities. DraftKings and FanDuel remain the clear market leaders, however, as they garnered 37.8% and 40.1% of GGR, respectively, for the month.
Still, when New York was removed from the equation, ESPN BET's market share grew to 2.8% for July.
“Our view is that ESPN BET will expand the market,” Rogers said. “That's been our experience in other jurisdictions where we've launched. We think we're attracting a new bettor, and while there could be some shifting and cannibalization in existing operators, we think we are growing the market.”
