PENN Entertainment may not have a casino, racetrack or online sportsbook in New York. But that isn’t stopping management from targeting the Empire State for its newest brand, ESPN Bet.
As relayed this week by the Earnings+More newsletter, analysts from Wells Fargo reported that PENN and ESPN have made it a “priority” to launch the newly branded sportsbook, particularly in New Jersey, Pennsylvania and Michigan — the country’s three biggest online casino markets.
However, Wells Fargo analysts also noted that PENN has said “being in New York is critical.”
Currently, only New York sports betting is legal. There are no regulated online casinos in the state. (Yet.)
ESPN Bet to launch in November
Analysts indicated that PENN expects ESPN Bet to go live in November and immediately grab an “elevated” market share in those jurisdictions. That’s already a lofty goal considering existing competition includes the likes of FanDuel and DraftKings, not to mention gaming stalwarts Caesars and MGM.
Obviously those expectations exist solely for states in which PENN Entertainment has access. New York – not one of them. But that is not stopping PENN from finding a way into the state and launching ESPN Bet NY.
While the tax rate remains sky-high, PENN “thinks it could likely be breakeven or better with double-digital share” in New York. But how can the company already be thinking about its New York product without an existing platform in the Empire State?
As Earnings+More quoted a Wells Fargo analyst as saying: “Two or three licenses could be up for grabs.”
How ESPN Bet can get into NY sports betting
At one point, Penn reportedly had a chance to join the NY sports betting crowd. FanDuel, DraftKings and BetMGM considered Barstool for the final spot in the Super Bid when the state was considering sportsbooks in 2021. However, as the New York Post reported, the trio instead went with Bally’s due to “past erratic behavior” exhibited by Barstool founder Dave Portnoy.
Interestingly, around the same time, PENN CEO Jay Snowden opined that, while the state might make money, “I don’t think a single operator will make money in New York.” He noted that while “you’d rather be in than not be in,” “it’s one of those states where if you’re not in, you’re not crushed by it either.”
Earlier this money, Wynn Resorts abruptly announced that it was shutting down its online sportsbook in seven states. New York, though, stayed online. Perhaps because Wynn sees the value in the license and may look to sell. Or maybe because of downstate casino expansion and potential legalization of New York online casinos.
In any case, PENN appears to be circling New York with its ESPN Bet sportsbook. And according to analysts, “management is confident can be competitive.”