PENN Entertainment receives regulatory approval for ESPN Bet’s New York launch
New York State Gaming Commission (NYSGC) unanimously approves the operator’s $25m acquisition of Wynn Interactive’s Empire State license
PENN Entertainment has received approval from the New York State Gaming Commission (NYSGC) to acquire Wynn Interactive’s gaming license in the state.
The NYSGC ruling gives PENN Entertainment the go-ahead to roll out its ESPN Bet brand in the Empire State.
PENN agreed a $25m deal with Wynn Interactive back in February, with a view to launching ESPN Bet in New York by the end of the year once regulatory approval was obtained.
The agreement involved PENN acquiring Wynn Interactive subsidiary WSI US, which had held a mobile sports betting license in New York since 2021.
The deal formed part of Wynn Interactive’s parent company Wynn Resorts’ plan to scale back its online sports betting operations in the US.
The company had shuttered operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virgina, and West Virginia by late 2023.
In addition to the New York departure this year, Wynn also completed the sale of its Michigan operations to Caesars Entertainment in June.
PENN, which is live in 19 jurisdictions across North America, was initially one of the first operators to apply for a sports betting license in New York when the application window first opened in 2021.
The company was unsuccessful on that occasion, with the state favoring FanDuel, DraftKings, BetMGM, Bally’s, Rush Street Interactive, Caesars, PointsBet, and WynnBet before the online market went live in January 2022 with a coordinated launch.
PENN, which also owns media brand theScore and theScore Bet in Ontario, said going into New York would mean its total addressable market in the US will increase from 40% of the US population to 46%.
Addressing investors and analysts on PENN’s Q2 earnings call, on August 8, CEO Jay Snowden said the company plans to maintain a “disciplined” approach to customer acquisition and engagement in New York.
He added: “Despite the challenging [51% GGR] tax rate, we will benefit greatly from ESPN’s extensive linear and digital reach there.”
The company was previously expecting the ESPN Bet brand to receive approval to launch in August, in time for the new NFL season, but the delay means the new entrant will be playing catch-up during the most important period of the year for customer acquisition and reactivation.
Online sports betting revenue in New York reached a 12-month low of $125m in August, according to figures released by the NYSGC.
This still represented a 26.9% year on year increase, while handle for the month reached $1.44bn.
Yesterday, September 23, PENN announced its second round of redundancies in two months for its interactive arm.
Although the number of layoffs was unspecified, it is expected that some within the ESPN Bet team will lose their jobs.
The first round of layoffs took place in July, with “a limited number” of employees let go as part of a streamlining process.