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Penn Acquisition Rumor Adds Latest Question to ESPN BET’s Future



Penn Acquisition Rumor Adds Latest Question to ESPN BET’s Future

Reports that Boyd Gaming has considered acquiring Penn Entertainment could shake up the national corporate gaming landscape. It could further jeopardize the future of the multi-billion dollar ESPN BET Investment. 

News broke June 21 that Boyd, one of the nation’s larger brick-and-mortar casino operators, has considered acquiring Penn Entertainment. Penn, the largest operator with more than 40 properties, is better known to many Americans as the driver behind ESPN BET. 

The deal faces major financial, logistical, and legal complications, the most significant being Boyd’s smaller market value. Though the deal could make sense economically, allowing the two companies to increase synergies and combine their respective player databases, it appears a long shot. 

Still, if completed, Boyd’s ownership stake in U.S. market leader FanDuel could potentially threaten the long-term future of Penn’s sports betting platforms. This in turn jeopardizes one of the most heavily invested sportsbooks in the country and one of the few remaining legal wagering options that has hopes to compete with the market leaders. 


Boyd and Penn had similar business models as of the May 2018 Supreme Court decision that struck down the federal sports wagering ban. Though Penn operated nearly twice as many properties, both focused on managing smaller, regional casinos.  

Sparked by the Court’s decision – and galvanized by the COVID-19 pandemic that shut down every commercial casino nationwide – Penn began investing hundreds of millions of dollars in an online casino and, more notably, sports betting platforms. 

Beginning in 2020, Penn spent several more than $500 million to acquire Barstool Sports to use as the branding for its online gaming offerings. It spent another $2.1 billion to acquire Canada-based sports media company theScore and its proprietary sports betting platform. 

By 2023, the sportsbook had low single-digit national market share and Penn has sold all Barstool properties back to founder Dave Portnoy for $1. It then doubled down on branded partnerships, this time on a 10-year, $1.5 billion deal with ESPN, the biggest name in American sports media. 

Since the re-launch of Penn’s sportsbook under the ESPN brand, the new ESPN BET has still not come close to the roughly 35% market share of both DraftKings and FanDuel – or even the nearly 20% target company officials announced ahead of the deal. Penn officials, including deal architect Jay Snowden, remain publicly bullish. Major questions remain, underscored by a May investor letter asking for Penn to divest itself of its money-losing digital gaming arm. 

Meanwhile, Boyd has focused on its core brick-and-mortar properties. Its Boyd-branded online sportsbook is only available in Nevada. The company has been more than content to cultivate its 5% ownership stake in the highest-grossing sportsbook in the country. 

Future of ESPN BET

Boyd’s rumored Penn acquisition would require the new company to divest some of its assets, almost assuredly including in states such as Louisiana, Missouri, and Indiana where they both operate casinos. It could also, by regulatory or financial pressures, lead it to let go of ESPN BET. 

Boyd could take sportsbooks in more than a dozen Penn casinos and rebrand them under the FanDuel name. The company already did so at its Fremont Hotel & Casino in downtown Las Vegas. 

It could also, potentially, look to let go of ESPN BET entirely.  

The sportsbook has cost billions of dollars and has yet to show a long-term path to profitability. With DraftKings and FanDuel effectively a national duopoly, and most remaining market share split between just a handful of major operators, the new Boyd may be content to focus on branding its online and retail sports betting properties under FanDuel, one of the most successful names in U.S. gaming. 

Boyd also wouldn’t have the burden of the financial (and psychological) investments in Barstool/ESPN BET and could be more willing to let it go – especially after it would have had to undertake a massive financial investment in the Penn acquisition. 

In this scenario, ESPN BET’s fate remains a major question. Would another company spend, presumably, several hundred million dollars to acquire it? 

DraftKings and FanDuel have already spent hundreds of millions investing in their own brands. The No. 3 and No. 4 sportsbooks by marketshare, BetMGM and Caesars, have likewise spent heavily, focusing their offerings around their respective casino operator parent companies. 

The next tier of operators could have interest, but those, too, seem like long-shot bets.  

Fanatics acquired PointsBet and is looking to revolve its online platform around its eponymous sports merchandise company. bet365, a major name in international gaming, is still a relative unknown in the U.S., but it appears the company is content with its current offerings. Hard Rock seems poised to follow the aforementioned major casino brands and use its own branding for its digital gaming offerings. 

Notably, all these operators have their own proprietary sportsbook software, one of the major assets of the ESPN sportsbook. 

The remaining smaller operators could be interested in taking on the branding of the “Worldwide Leader in Sports,” but they financially may be unable to do so.  

Time for a smaller operator to make such a deal may also be running low.  

Tipico, a European leader with high hopes for the U.S., announced Monday its American assets were being acquired by BetMGM. This follows of WynnBet, TwinSpires, 888 and nearly a dozen other companies that have all either been acquired or shut down. More than six years after the opening of nationwide U.S. sports betting, it appears increasingly certain the industry will be dominated by a handful of major operators. 

This reality makes it harder to imagine any non-gaming company looking to jump into the industry. It seems that a company with such ambitions would have done so before national market share became ensnared by the small group of market leaders. 

Disney-parent ESPN taking control of its branded sportsbook could be a solution. But the branding deal with Penn was itself a watershed moment in a company that had largely avoided gaming and cultivated a “family-friendly” image. It would seem running a sportsbook – especially one that has so far lost significant money at a time when Disney is facing unparalleled investor scrutiny over its losses in other areas of the company – may be too much for management to take on. 

Bottom line 

It seems unlikely a Boyd-Penn deal will happen any time soon – if at all. Disney would have a say in any such deal involving ESPN BET, further complicating any such move.  

Still, the rumored merger reiterates the pressures facing Penn and especially ESPN BET and could be another threat to its existence entirely. 

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