Regulators in Massachusetts plan to take a long look at the recently announced ESPN-PENN deal that will lead to a major rebrand of one of the commonwealth’s authorized sports betting sites.
The Massachusetts Gaming Commission (MGC) met Thursday and discussed the transaction announced earlier this month by Barstool Sportsbook-owner PENN Entertainment Inc.
The new legal sports betting partnership between PENN and ESPN will see the former pay the latter more than $1.5 billion over 10 years for branding rights. The agreement will also see PENN rebrand the mobile version of Barstool Sportsbook as ESPN Bet in the U.S. this fall and continue to operate the wagering platform. ESPN, meanwhile, will promote the book to its audience.
The MGC heard Thursday that PENN plans on completing the rebrand from Barstool to ESPN Bet in November on the mobile side and that the brick-and-mortar betting facilities at the PENN-operated Plainridge Park Casino are already being overhauled. Other than getting a makeover on the consumer-facing side, the mobile sportsbooks would run on the same platform as it has.
“It's really a change of the branding alone,” said Loretta Lillios, the director of the MGC’s Investigation and Enforcement Bureau.
No fan of the brand
Still, the Barstool-related branding proved contentious during the MGC’s initial review of PENN’s bid to offer online sports betting in Massachusetts. The Barstool-style of promotion didn’t sit entirely right with some commissioners, and PENN agreed to certain conditions on its initial license, including a review of the Barstool branding.
However, as part of the transaction announced this month, PENN is distancing itself from that brand. The company said it was essentially giving back the Barstool Sports media operation to its founder, Dave Portnoy, in return for non-compete and other agreements. PENN could receive 50% of gross proceeds received by Portnoy if there is another sale of Barstool Sports.
Lillios said the regulators want time to review the agreement between PENN and ESPN.
“There certainly are responsible gaming and other compliance issues that are relevant in that agreement,” she told commissioners. “We've requested documents already from PENN and they're forthcoming.”
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Sportsbook evolution
Barstool is one of eight online sportsbooks currently taking bets in Massachusetts, which launched mobile wagering in March. In July, the operator handled nearly $11.7 million in wagers, ranking it fourth among bookmakers.
Lillios said PENN won’t have to reapply for a Massachusetts sports betting license, as it is still operating under a temporary permit in the state and undergoing a full suitability review already. Further scrutiny and information about the merger and its potential effects on wagering in the state will happen at a future MGC meeting.
“These companies are constantly evolving and changing,” Lillios said. “This is a big one. And I expected that you would want to hear from the company.”
