PENN pays $25m to acquire New York sports betting licence from Wynn Interactive
ESPN Bet to launch in the Empire State by the end of the year while Wynn continues to drastically scale back its US online footprint
PENN Entertainment has agreed to acquire Wynn Interactive’s New York sports betting licence in a $25m deal to bring ESPN Bet to the Empire State.
PENN confirmed it has reached an agreement with the Wynn Resorts subsidiary and that it plans to launch ESPN Bet in New York before the end of 2024.
As part of the deal, PENN has acquired WSI US from Wynn Interactive for $25m and will go up against eight other online betting brands in a state that generated a combined $1.96bn in handle and $211.5m of gross revenue during January.
WSI US is the subsidiary that holds the mobile sports betting licence previously issued by the New York State Gaming Commission in 2021 ahead of the market’s digital launch in early 2022.
Wynn Interactive, which operates the WynnBet platform, exited eight US states in August as the operator pointed to spiraling customer acquisition costs.
The firm shuttered operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virgina and West Virgina but kept New York and Michigan operational, yet “under review”.
At the time, Wynn Resorts chief financial officer Julie Cameron-Doe said the decision was made “in light of the continued requirement for outsized marketing spend.”
In January, Wynn reported just $8.8m handle in New York, with gross revenue coming in at $358,497, the lowest achieved by the nine licensed sportsbooks.
By comparison, market leader FanDuel reported handle of $867.1m and gross revenue of more than $109m.
Wynn has yet to release a statement on the divestment of its New York sports betting licence, or an update on its plans for Michigan.
However, last month the firm confirmed its intention to exit the Massachusetts online sports betting market.
ESPN Bet, which launched in November on the back of a $1.5bn licensing deal over 10 years between PENN and the Disney-owned sports broadcaster, has made significant dents in its early operations.
The brand has made challenges for podium positions in markets including Massachusetts and Indiana.
Jay Snowden, PENN CEO, said: “This is an important development that will bring ESPN Bet to the largest regulated online sports wagering market in North America.
“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,” he added.