ESPN and casino owner Penn Entertainment have announced a deal to launch a new branded gambling service called “ESPN Bet,” which will reportedly replace Barstool Sportsbook.
The $2 billion deal includes Penn paying ESPN $1.5 billion in cash over the initial 10-year term. Another $500 million is set to be paid in warrants that will vest over that term “in exchange for media, marketing services, brand and other rights provided by ESPN,” the deal states.
ESPN is planning to roll out the new sportsbook this fall in the 16 states where Penn holds betting licenses.
The states eligible include Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. Currently, PENN does not hold a license in New York.
“Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” said ESPN chairman Jimmy Pitaro.
“The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN,” Pitaro added. “Penn Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN Bet.”
As part of the deal, Penn has also agreed to sell Barstool Sports back to Barstool founder Dave Portnoy.
Penn originally purchased a 36% stake of the brand for $163 million back in 2020, and just five months ago purchased the balance of Barstool for an additional $388 million.
Jay Snowden, Penn's CEO, said he saw the deal as part of his company’s transformation into a “North American entertainment leader.”
“ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem,” he added.