ESPN Bet will be landing in New York sooner than many thought. Penn Entertainment has struck a deal to buy one of only nine precious mobile sports betting licenses to operate in the state.
Penn Ents is the company behind the ESPN-branded sportsbook that has been rolling out across the US since mid-November. The former Bar Stool operator will acquire WSI US from Wynn Interactive Holdings in a deal worth $25 million.
Originally stating “I don’t think a single operator will make money in New York” in 2021, Penn Entertainment CEO Jay Snowden is now stating, “This is an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America,” referring to the deal.
Its new market access will now enable Penn Entertainment to launch ESPN Bet in New York, the largest state for sports betting in the nation.
Penn is the joint-venture owner of ESPN Bet alongside the broadcasting giant whose name fronts the sports betting platform as one of the top NY sportsbooks. ESPN Bet is currently live in 17 US states, including New Jersey.
The deal between Penn and Wynn was announced on February 14 but is still subject to regulatory approval. That will take a few more months to be ratified but it is expected that ESPN Bet New York will get the go-ahead in the second half of 2024.
Penn Entertainment’s $25 million purchase of the Wynn subsidiary whose New York license it will inherit appears at first glance to be chicken feed in the multi-billion dollar sports betting industry.
By comparison, Fanatics bought out PointsBet for $150 million last year but that encompassed operations in New York and 14 other states. It’s thought that Penn has already invested some £2 bn in promoting its new sportsbook brand across the US.
It might not come as a surprise to see WynnBet divest its New York operations. The brand exited most states in which it operated last summer. That move left only New York, Nevada, Michigan and Massachusetts in its portfolio.
Wynn has since announced the imminent closure of its presence in MA. That will happen by April 12. Nevada and Michigan remain under review as Wynn pivots away from sports betting to concentrate on its core iGaming offer. The company has said it will continue to operate in those two states in which it has a significant physical presence.
It had been speculated that Wynn would remain in New York for the same reason as it eyed up a position among the next batch of successful bidders for brick-and-mortar casinos in the state.
As it turned out, WynnBet’s position as a sportsbook that failed to make any headway in the Empire State put an end to that strategy. The hunger of Penn Entertainment to gain one of the licenses in the operator-capped New York industry meant its offer forced the hand of Wynn to give up on its seemingly doomed and ultimately futile pursuit of NY market share.
