The acquisition gives Penn market access in New York state. As part of the deal, Penn will acquire Wynn Resorts subsidiary Wynn Interactive’s mobile sports wagering licences entity, WSI US, LLC, for $25m (£19.8m/€23.3m).
WSI US, LLC holds the sports betting licences issued to Wynn by the New York State Gaming Commission in 2021.
Upon relevant approvals, Penn will launch ESPN Bet in the state later this year. Penn partnered with ESPN in August last year, in a deal that saw Penn’s Barstool Sportsbook rebranded as ESPN Bet. It then launched across 17 US states in November.
Jay Snowden, CEO and president of Penn Entertainment, said this acquisition will expose ESPN Bet to the most prominent sports betting market in the US.
“This is an important development that will bring ESPN Bet to the largest regulated online sports wagering market in North America,” said Snowden. “Together with ESPN, we’re building a brand that is synonymous with sports betting, and operating in the New York market is key as we grow ESPN Bet across the US.”
Another nail in the coffin for Wynn Interactive
The acquisition is perhaps another hallmark of Wynn Interactive’s diminishing presence in the US.
In August last year, Wynn Resorts remarked that its interactive division was underperforming in the US. This saw its prompt withdrawal from eight states – Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia.
At the time, its performance in New York and Michigan continued under review. Now, it has essentially passed the baton to ESPN Bet – one of the biggest contenders in the US sports betting market currently – for the Empire State at least.
Just earlier today, Wynn Interactive confirmed that it has ceased operating WynnBet – its leading brand – in Massachusetts. Players have until 13 March to withdraw existing funds from their WynnBet accounts.
The acquisition of WSI US, LLC also comes after Wynn Resorts reported growth in its Las Vegas and Boston businesses in its full-year 2023 results last week.
What lies ahead for ESPN Bet?
With 17 states now under its belt – and New York pending – things clearly aren’t slowing down for ESPN Bet.
ESPN’s foray into sports betting – which was five years in the making – was the industry’s hottest topic for quite some time, with speculation focusing on which operator would make the grade.
Ahead of rumoured deals with DraftKings and Caesars Entertainment, emerged Penn. And it’s paid off for the operator, even considering the $724.8m net loss it recorded in Q3 2023 as a result of the Barstool divesture.
As was extensively covered, Penn sold Barstool back to its founder, Dave Portnoy, for $1. Of course, this greatly affected the balance sheet.
The future has definitely looked bright since then. Mike Morrison, vice president of sports betting at ESPN spoke to iGB both before and after ESPN Bet launched. Morrison told iGB that Penn will control all market access deals and negotiations for ESPN Bet – something evidenced with today’s acquisition announcement.
New York, New York
New York is by far North America’s most lucrative state. In January 2024, operators generated $211.5m in revenue, breaking records for the third month in a row.
The January total was 12.3% ahead of the previous record of $188.3m set in December of 2023. It was also 41.6% more than the $149.4m reported in New York in January last year.
In terms of handle, players wagered a total of $1.96bn during the month. This was 9.5% up from $1.79bn in January 2023 but 3.9% less than December’s $2.04bn. It was also 6.7% behind the record $2.10bn reported in November last year.
Current brands active on the market include FanDuel, DraftKings, Bally Bet, BetMGM, Caesars Sportsbook, Fanatics Sportsbook, Resorts World Bet and BetRivers.
Flutter Entertainment’s FanDuel remains the frontrunner by some distance. In January, FanDuel claimed a state record of its own, posting $109.2m in online betting revenue. This was the highest figure ever posted by a single operator.
It was also the first time any licensees reported in excess of $100.0m in one month. FanDuel processed $867.1m in wagers during the month.
Interestingly, Wynn Interactive places final in the rankings, with $358,497 in revenue off an $8.8m total spend.
Original article: https://igamingbusiness.com/legal-compliance/licensing/penn-entertainment-to-acquire-wynns-ny-sports-betting-licences-launch-espn-bet/
