ESPN Bet plans launch in New York, the largest U.S. betting market

Courtesy: ESPN Bet

ESPN Bet is coming to the Big Apple.

Penn Entertainment, which operates the sports betting platform, will pay Wynn Resorts $25 million for market access, it said Tuesday. It's the same amount Wynn paid New York state to operate there.

Wynn Interactive, a subsidiary of Wynn Resorts, was awarded a New York mobile sports betting license in 2021. Penn was not — and it has missed out on the action from the nation's largest sports betting market.

In the two years since New York launched online sports betting, at least $35.7 billion has been wagered in the state. During every month but one during that period, it has had a higher betting handle than any other state.

At the time the state awarded licenses, speculation was rampant that Penn lost out on one for its Barstool Sportsbook due to controversy surrounding Barstool founder Dave Portnoy. Neither the New York State Gaming Commission nor the company ever confirmed that.

But last year, Penn sold Barstool back to Portnoy for $1, after paying $551 million.

The transaction came as Penn made a $1.5 billion deal over 10 years, plus $500 million in stock warrants, to license one of the most recognizable brands in sports: ESPN.

When ESPN Bet launched in mid-November, well after the start of the National Football League season, it was in some 17 states and had roughly 2% market share. But it saw a notable improvement almost right away. For instance, it grabbed 7.4% market share in Pennsylvania in November, up from 3.7% in October.

FanDuel and DraftKings still occupy a near duopoly nationally, with BetMGM and Caesars taking up the third and fourth positions. But Eilers & Krejcik estimated ESPN Bet came away with 8% market share when it launched in November, good enough to take a third-place position.

Bank of America analyst Shaun Kelley wrote in a note Friday that ESPN Bet could be a surprise beneficiary of Taylor Swift fans tuning into the NFL, and Sunday's Super Bowl specifically, due to the singer's relationship with Kansas City Chiefs tight end Travis Kelce.

Now, if New York gaming regulators sign off on the license transfer to Penn, ESPN Bet could provide new and potentially formidable competition in the nation's biggest sports betting market.

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