PENN Entertainment announced Tuesday that it has reached an agreement with Wynn Interactive Holdings to purchase its mobile ESPN BET to enter the nation’s largest marketplace.
PENN Entertainment, which was the largest U.S.-based platform to be shut out of the Empire State prior to its launch of WynnBET in New York. The New York State Gaming Commission still has to approve ESPN BET before it can accept any wagers, but PENN expects to launch at some point in 2024.
“This is an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America,” said Jay Snowden, PENN Entertainment CEO and President, in a statement. “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 U.S.”
New York has been the largest legal betting market in the United States since adding mobile wagering availability just over two years ago. It has generated more than $37 billion handle in the 25 months that online betting has been available and is the only state to sur more than $2 billion in monthly handle, having accomplished that three times in 2023. New York also reclaimed the national monthly record for operator revenue in January, as sportsbooks totaled $211.7 million in revenue.
At last, PENN finds a path into New York 6o723i
Once PENN Entertainment rebranded to ESPN BET last August, it felt like a matter of “when” and not “if” it would find a way into the New York mobile betting market. That time has finally arrived with the agreement to acquire WynnBET’s license, and the $25 million price tag is only a slight , as the license itself still has roughly eight years remaining on its 10-year term.
In three-plus months since entering the sports betting space with a handle and revenue figures, it placed in the top five for handle in all 11 states and reached third in some markets.
| State | November 2023 Handle | Pct of Mobile Handle | November 2023 Revenue | Pct of Mobile Revenue | Known Promotional Spend |
|---|---|---|---|---|---|
| Maryland | $33,309,326 | 6.25% | $4,179,395 | 10.32% | $13,023,420 |
| Iowa | $15,296,211 | 5.75% | $1,820,953 | 14.44% | N/A |
| Indiana | $27,452,640 | 5.53% | $2,610,503 | 10.07% | N/A |
| Kansas | $21,524,694 | 8.55% | $2,642,652 | 15.16% | $6,317,188 |
| Massachusetts | $39,083,620 | 6.14% | $5,808,628 | 11.59% | N/A |
| Michigan | $49,876,542 | 8.77% | $6,090,262 | 17.95% | $16,044,642 |
| Pennsylvania | $65,090,379 | 7.42% | $6,998,217 | 15.02% | $14,826,780 |
| Ohio | $70,848,937 | 8.42% | $12,009,457 | 16.96% | $29,020,106 |
| Virginia | $26,928,237 | 4.26% | $3,377,173 | 7.94% | N/A |
| Illinois | $81,077,127 | 6.06% | $7,516,815 | 10.66% | N/A |
| Arizona | $39,024,967 | 5.53% | $3,882,844 | 9.27% | $3,785,281 |
| TOTALS | $469,512,680 | 6.57% | $56,936,899 | 12.57% | $83,017,417 |
PENN showed no promotional price tag was too large during its rollout, marking its entrance with heavy spending regardless of whether it could deduct those credits against gross revenue. New York does not allow deductions for promotional play and brings in a wild card with its 51% tax rate on adjusted gross revenue — the highest in the nation.
An eight-figure promotional spend in PENN’s first month of operation in New York would be expected, but whether it Ohio market — a state with a 20% tax rate and no deductions allowed — remains to be seen.
| State | November 2023 Handle | November 2023 Mobile Market Share | December 2023 Handle | December 2023 Mobile Market Share |
|---|---|---|---|---|
| Illinois | $81,077,127 | 6.06% | $96,527,896 | 7.58% |
| Pennsylvania | $65,090,379 | 7.42% | $81,161,570 | 9.32% |
| Ohio | $70,848,937 | 8.42% | $72,862,647 | 9.00% |
| Arizona | $39,024,967 | 5.53% | N/A* | N/A* |
| Maryland | $33,309,326 | 6.25% | $42,390,776 | 7.83% |
| Virginia | $26,928,237 | 4.26% | $36,557,502 | 5.84% |
| Massachusetts | $39,083,620 | 6.14% | $49,981,962 | 7.59% |
| Michigan | $49,876,542 | 8.77% | $55,240,435 | 9.47% |
| Indiana | $27,452,640 | 5.53% | $32,993,334 | 6.77% |
| Kansas | $21,524,694 | 8.55% | $22,609,997 | 9.08% |
| Iowa | $15,296,211 | 5.75% | $18,845,966 | 7.30% |
| *Arizona has not released December figures as of Feb. 14 |
ESPN BET will also face a challenge in cutting into the market share of both BetMGM.
In some states, ESPN BET has also shown deeper pockets than PointsBet in New York.
“With no competitive advantage in New York, we do not see it overperforming or underperforming its current market share of mid-to-high single digits once it launches later this year,” JMP Securities analyst Jordan Bender said of the PENN/ESPN BET entry in a research note. “We currently model the company garnering 9 percent sports betting market share in its operation states for the full year 2025.”
WynnBET lacked early traction 2f324w
WynnBET was seventh among the nine mobile operators when it came to launching in New York, doing so nine days before Super Bowl LVI in 2022.
The combination of being behind the bigger operators in the space plus their outsized promotional outlay at launch proved too much for WynnBET to overcome. There was never a sense of urgency to improve its market share; in fact, WynnBET went in the other direction, as it pulled out of multiple states last August.
It recently Michigan and Nevada.
Once it leaves both Massachusetts and New York, WynnBET will conduct online betting only in Michigan and Nevada.
In 109 weeks of mobile wagering, WynnBET never achieved a $3.5 million weekly handle and sured $3 million just five times. Its best month for handle was $12.3 million in October 2023. To put that in perspective, consider FanDuel’s handle last week alone was nearly 14 times that amount at $167 million, and WynnBET’s all-time handle of $216.4 million would rank third on FanDuel’s all-time weekly handle list.
In of wins and losses when it came to revenue, WynnBET struggled there as well. Its 17 weekly losses were the most of any of the nine operators, and it was the only operator to endure three consecutive losing weeks. Furthermore, WynnBET is the only mobile operator with back-to-back losing months and had the largest single monthly loss to date when bettors came out more than $323,000 ahead in December.
In midday trading, Wynn was down more than 1% to $104.43 per share as of noon ET. PENN Entertainment was trading down more than 2.5% to $22.81.
Additional reporting provided by Matt Rybaltowski
