Penn National Gaming Strikes Sports Betting Deals With DraftKings, Kambi, And More
Penn National Gaming has removed any remaining doubt about its plans to capitalize on US sports betting expansion.
The company issued a press release late Wednesday, announcing an impressive new quartet of market-access agreements. Penn's new partners include some of the most ambitious names in the game — both in sports and in other forms of online gambling:
- DraftKings Sportsbook
- The Stars Group
Additionally, UK-based Kambi announced that has agreed power Penn's in-house sportsbooks across its entire portfolio. Penn currently owns and/or operates more than 40 properties in 19 states, including eight with legal sports betting.
Here's Penn's SVP of Interactive Gaming Jon Kaplowitz on the big news:
“We’re pleased to be providing the top names in sports betting, iGaming and poker access to our Company’s non-primary licenses to conduct these operations in exchange for a combination of upfront cash and equity, one-time market access fees and ongoing revenue sharing.”
Penn's new US sports betting roadmap
This announcement changes everything for Penn.
It looks like the end of its William Hill partnership, for starters, which never broadened after the trial run in Pennsylvania and West Virginia. Penn will instead employ Kambi to power its products going forward, including both retail and online betting.
Kambi CEO Kristian Nylén called it “an honour” to sign the agreement, the biggest yet for his company:
“Kambi’s strategy has always been to partner with tier one operators, particularly those that share our vision and passion for sports and sports wagering. In Penn National, we have found an ideal partner – one that is not only passionate about providing high quality sports wagering experiences to its customers, but a company that adheres to the highest level of ethical business standards.”
According to Kambi press, it expects to open its first Penn sportsbooks Indiana and Iowa in Q3 of this year. Online sports betting could come as early as 2020 under the new partnership.
Penn holds the door for new partners
As game changing as it is, the Kambi announcement is arguably the smaller deal for the industry as a whole. Penn has also entered into partnerships with four up-and-coming operators, each of which appears well positioned in its own right.
The big shakeup has apparently been brewing for quite some time, as the press release includes a detailed breakdown of the game plan — and the financials. Here's who gets what and how much it cost them (skin priority in parenthesis, legalized states bold):
DraftKings Sportsbook comes up big
- States: Florida (1), Indiana (3), Missouri (1), Ohio (1), Pennsylvania (1), Texas (1), West Virginia (2)
- Terms: 10 years, optional 10-year extension
- Cost: Revenue share
There are certainly several winners out of all these deals, but the biggest impact in the short term might be for DraftKings Sportsbook.
The key news out of all of this is DraftKings is coming to Pennsylvania, a nut that the sportsbook had not cracked. While FanDuel Sportsbook PA is already live, DraftKings was, until today, still looking for a way into the state.
Here's CBO Ezra Kucharz:
“With dozens of states having already legalized sports betting or poised to do so in the near future, this expanded partnership ensures DraftKings is positioned to quickly enter new markets. Penn National Gaming brings tremendous resources, people and experience to the partnership and, as we finalized the terms of the deal, it was abundantly clear there is a real synergy between our two companies that bodes very well for the future.”
DraftKings already had a market-access deal with PNG for West Virginia; its app should roll out there sometime in the near future. The company will have the honor of deploying Penn's first skin when Indiana sports betting launches later this year.
PointsBet lands its largest deal to date
- States: Indiana (2), Louisiana (1), Missouri (1), Ohio (1), West Virginia (3)
- Terms: 20 years
- Cost: Revenue share + 5.28% equity + $2.5 million conditionally for Ohio
PointsBet is no doubt the smallest company mentioned in this piece, but it is clearly not one to be underestimated. After importing its product from Australia, the young US operator is already making some noise.
It was one of the first to line up a spot in the NJ sports betting market, partnering with Meadowlands back in mid-2018. That deal also includes access to New York via Tioga Downs, though NY lawmakers failed to authorize online betting this year. Lastly, PointsBet has also secured a spot in the Iowa market via a partnership with Catfish Bend.
PointsBet brings its popular and proprietary Points Betting system to the Penn network, a key differentiator in an increasingly competitive industry.
TheScore also scores for its sportsbook
- States: Indiana (2), Iowa (2), Kansas (3), Louisiana (1), Maine (3), Massachusetts (3), Michigan (3), Mississippi (1), Missouri (2), Ohio (2), Texas (2)
- Terms: 20 years
- Cost: Revenue share + 4.7% equity
Media company theScore — best-known for its sports app — is coming to New Jersey with a sportsbook, probably as soon as next month.
It has a deal with sports betting provider Bet.Works for its sports betting platform. But its path to getting into other states had remained a mystery. Now it has a lot of market access — 11 states to be exact.
Here's CEO John Levy:
“Securing this highly-coveted partnership with Penn National is a major step towards our goal of becoming a leader in mobile sports betting in the United States. We are thrilled that Penn National believes in, and has invested in, our vision of an integrated approach to media and sports betting and we can’t wait to unveil the best-in-class mobile betting experience that we’ve been building for sports fans.”
The Stars Group finds a master key
- States: Illinois (1), Indiana (1), Kansas (2), New Mexico (2), Maine (2), Massachusetts (2), Michigan (2), Ohio (1), Texas (1)
- Terms: 20 years
- Cost: Revenue share + $12.5 million + $5 million conditional for Texas
This one is perhaps the most intriguing of the bunch.
The Stars Group is the world's largest public online gambling company, and it has begun to establish a prominent US footprint. It already offers all three online gambling verticals in New Jersey — casino, poker, and sports — under its own Stars-themed brands, but it's been doing some of its own shopping.
In May, Stars announced a first-of-its-kind partnership with Fox Sports which will move the broadcaster into the gambling realm. The duo are working to create a new FoxBet platform to replace the existing BetStars client in the US.
With industry-leading technology and a world-class partner under its belt, market access was essentially the only thing Stars was lacking in the US. That's essentially solved now, and Penn's blueprint puts TSG at the forefront in major sports markets like Illinois, Indiana, and (optimistically) Texas.
TSG also provides Penn a turnkey online casino and poker partner in markets where those forms of gambling are legal.
The post Penn National Gaming Strikes Sports Betting Deals With DraftKings, Kambi, And More appeared first on Legal Sports Report.
Andy has been writing and posting about offshore sportsbooks for over 15 years. He's also an active sportsbook bonus seeker and seasoned online gambler on US sports.
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