Gaming giant, Penn National, secures market access agreements with DraftKings, PointsBet, theScore, and The Stars Group.
Get Ready for a US Gambling Market Shake-Up!
Penn National Gaming, now known as Penn Entertainment, just announced some high-stakes moves that could change the gaming landscape over the next decade.
In a flurry of multi-year agreements, Penn has teamed up with top names like DraftKings, PointsBet, theScore, and The Stars Group. These power players will now have access to Penn Interactive Ventures (PIV), a subsidiary of Penn Entertainment, to operate online sports betting, poker, and casino offerings.
Jon Kaplowitz, Penn's senior vice president of interactive gaming, shared his excitement about these arrangements, saying, "We're giving the best in the business a chance to shake up our non-primary licenses in exchange for some sweet cash, equity, fees, and a cut of the profits."
Skin Deals, A Game Changer
These deals were struck through something called "skin agreements." Kaplowitz explains these as a way for online sportsbook operators to tap into licenses held by land-based casinos. Funny how a simple skin deal can lay the groundwork for a gaming empire.
Each partner in this game of skins will have the option to own, operate, and brand their offerings. But hey, who said life was fair? These deals are subject to license availability, state laws, and regulatory approvals. In some states, like New Jersey and Indiana, casinos can get their hands dirty with up to three skins, while in Pennsylvania, they're limited to just one.
DraftKings, which already dominates the New Jersey market, is set to enter seven additional states. Penn Entertainment and DraftKings had previously collaborated in West Virginia. Now, DraftKings will gain market access in Florida, Indiana, Missouri, Ohio, Pennsylvania, and Texas. The duo has sealed a 10-year partnership, with a potential 10-year extension, making it a full-blown decade-long commitment.
DraftKings Chief Business Officer, Ezra Kucharz, greeted the news with a celebratory press release, saying, "With nearly half the states legalizing sports betting or on their way, we're ready to storm the gates and conquer the nation with Penn Entertainment."
PointsBet USA Inc., a subsidiary of Australian-based PointsBet Holdings Limited, walked away with market access to five states - Indiana, Louisiana, Missouri, Ohio, and West Virginia. They're in this game for the long haul, with a 20-year agreement starting from when their brand is officially offered to customers in each state.
PointsBet CEO Sam Swanell couldn't hide his excitement, saying, "Partnering with Penn is like finding that long-lost winning lottery ticket—it's a dream come true!"
Breaking Down the Skin Partnerships
Here's a quick rundown of the skin deals:
- DraftKings: Seven states (Florida, Indiana, Missouri, Ohio, Pennsylvania, Texas, West Virginia) for 10 years, renewable with a 10-year extension. The majority of revenue shared with Penn Entertainment.
- PointsBet: Five states (Indiana, Louisiana, Missouri, Ohio, West Virginia) for 20 years. Similar revenue-sharing terms with Penn Entertainment, plus a strategic 5.28% equity stake, and additional options to acquire more shares.
- theScore: Nine states (Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Missouri, Ohio, Texas) for 20 years. Revenue-sharing agreement plus a strategic 4.7% equity stake with the potential for growth.
- The Stars Group: Eight states (Illinois, Indiana, Kansas, New Mexico, Maine, Massachusetts, Michigan, Ohio, Texas), for 20 years. Initial upfront payment, added Texas access fee, ongoing revenue sharing, and a bonus based on net gaming revenue in 2023.
So there you have it, folks. Penn Entertainment is ready to dominate the US gambling market with some heavy-hitters by its side. Buckle up, because this ride is just getting started!
- Penn National Gaming, now known as Penn Entertainment, has entered into multi-year agreements with DraftKings, PointsBet, theScore, and The Stars Group, giving them access to Penn Interactive Ventures (PIV) for online sports betting, poker, and casino offerings.
- These arrangements were made through "skin agreements," allowing online sportsbook operators to tap into licenses held by land-based casinos, potentially creating a gaming empire.
- Each partner in this deal has the option to own, operate, and brand their offerings, subject to license availability, state laws, and regulatory approvals.
- DraftKings, a dominant player in the New Jersey market, will enter seven additional states, gaining market access in Florida, Indiana, Missouri, Ohio, Pennsylvania, and Texas through a 10-year partnership with Penn Entertainment.
- PointsBet USA Inc. will have market access to five states - Indiana, Louisiana, Missouri, Ohio, and West Virginia - for 20 years, with a strategic equity stake and additional options to acquire more shares.
- theScore and The Stars Group have also agreed to partnerships with Penn Entertainment, each for 20 years, with revenue-sharing agreements and equity stakes.
- With these skin deals, Penn Entertainment is positioning itself to dominate the US gambling market, including sports betting, with a strong line-up of partners in finance, business, casino-and-gambling, and sports.
