Penn National, North America’s largest gambling operator, has landed a deal that is set to make it a sportsbetting powerhouse.
It announced on Wednesday that it had signed long-term agreements with some of the US’s leading sportsbook operators.
The operators, all New Jersey-based, are DraftKings, PointsBet, The Score, and the Stars Group.
DraftKings was the first to launch an online sportsbook when betting became legal in NJ in May 2018. Together with fellow fantasy sports giant FanDuel; it is also one of the garden State’s sports-betting market leaders.
PointsBet, a subsidiary of Australian-based PointsBet Holdings Limited, is a more recent NJ sport-betting entry. But make no mistake; it hit the ground running when it did arrive earlier this year.
PointsBet, a subsidiary of Australian-based Point`sBet Holdings Limited, is a more recent NJ sport-betting entry. But make no mistake; it hit the ground running when it did arrive earlier this year.
Canadian-based theScore has never operated a sportsbook. Essentially an online media company, its main function has been to supply North American sports fans with news and data.
It has been hard at work recently, however, at setting up a sportsbook in New Jersey that will offer sports fans of that state the best of both worlds.
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The Score building a best-of-both world’s sportsbook
On the one hand, punters will have access to accurate, in-depth sports news and data. On the other, they’ll be able to use it to wager on an efficient, up-to-date betting platform. Expect it to be launched shortly, just prior to the start of the NFL football season.
The Star Group is a publically-listed Canadian-based international gaming giant that owns Poker Stars and recently purchased Sky Betting.
Penn National’s agreements with its new partners will give the four sportsbooks access to many new markets.
This, according to Penn National’s Jon Kaplowitz, will be via a nationwide chain of licensed gaming operations managed by Penn Interactive Ventures, LLC (PIV).
“We’re pleased to be providing top names in sports betting, iGaming and poker access to our Company’s non-primary licenses.
They’ll be able to conduct these operations in exchange for a combination of upfront cash and equity, one-time market access fees, and ongoing revenue sharing,” Kaplowitz said in a press release.
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Penn partners will have ownership and branding option.
He added that each of Penn National’s new skin partners would have the option to own, operate and brand real-money online sports-betting, poker, and casino operations.
The skin deals will be subject to licenses being available, to state law and to regulatory approvals which differs in some states.
For example: Whereas in New Jersey and Indiana, each casino operator may use up to three skins, those in Pennsylvania can only use one.
On Wednesday night Penn National released a document showing how the four new operators would gain access to various states. And yes, that included states like Texas where sports betting may not become legal for years to come. Here’s how the individual deals will work.
- New states covered: Florida (1stskin), Indiana (3rd skin), Missouri (1st skin), Ohio (1st skin), Pennsylvania (1stskin), Texas (1st skin) and West Virginia (2nd skin)
- Term of agreement: 10 years, subject to a 10-year extension
- Key economic terms: Revenue share to Penn National based on net gaming revenue
- States covered: Indiana (2nd skin), Louisiana (1st skin), Missouri (1st skin), Ohio (1st skin) and West Virginia (3rd skin)
- Term of agreement: 20 years
- Key economic terms: Revenue share to Penn National based on net gaming revenue
- Equity position: PIV will take a strategic equity stake of 5.28 percent in PointsBet, with an additional $2.5 mm access fee for Ohio, based on certain conditions, payable in cash or equity at Penn National’s option. In addition, PIV will receive 10,372,549 options, exercisable for two years, to acquire additional shares of PointsBet
theScore:
- States Covered: Indiana (2ndskin), Iowa (2nd skin), Kansas (3rd skin), Louisiana (1st skin), Maine (3rdskin), Massachusetts (3rd skin), Michigan (3rd skin), Mississippi (1st skin), Missouri (2nd skin), Ohio (2ndskin) and Texas (2nd skin)
- Term of agreement: 20 years
- Key economic terms: Revenue share to Penn National based on net gaming revenue
- Equity Position: PIV will take a strategic equity stake of 4.7% in theScore, with the potential for this stake to increase as additional market access fees become payable.
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The Stars Group:
- States covered: Illinois (1stskin), Indiana (1st skin), Kansas (2nd skin), New Mexico (2nd skin), Maine (2nd skin), Massachusetts (2nd skin), Michigan (2nd skin), Ohio (1st skin) and Texas (1st skin)
- Term of agreement: 20 years.
- Key economic terms: Upfront payment of $12.5 mm payable cash, with an additional access fee of $5 mm in cash for Texas based on certain conditions; revenue share to Penn National based on net gaming revenue, with a one-time bonus based on net gaming revenue in 2023,
DraftKings Chief Business Officer Ezra Kucharz said he believed “this expanded partnership ensures DraftKings is positioned to quickly enter new markets.”
“Penn National Gaming brings tremendous resources, people and experience to the partnership. It is abundantly clear there is a real synergy between our two companies that bodes very well for the future.”
PointsBet CEO Sam Swanell reacted to the new deal by saying: “Partnering with Penn provides PointsBet access to five important states.
“There is also potential for further state deals. We are delighted to partner with such a forward-thinking and innovative organization.”
Wherever possible, Penn Interactive Ventures will run its sports betting and iGaming operations on a Kambi Group software platform. Kambi is already the supplier to a number of New Jersey sportsbooks including DraftKings and 888sports.
“Kambi’s strategy has always been to partner with tier one operator,” its CEO Kristian Nylén said in Wednesday’s press release.
“And this applies particularly so to those who share our vision and passion for sports and sports wagering.
“In Penn National, we have found an ideal partner. For one thing, they are passionate about providing high -quality sports wagering experiences to their customers.
“For another, they adhere to the highest level of ethical business standards.”
