ESPN is launching an online sportsbook, putting its brand on a gambling platform for the first time.
In a release Tuesday afternoon, the Disney-owned property said it would partner with the sports betting group Penn Entertainment to rebrand Barstool Sportsbook as ESPN Bet. It will launch this fall.
ESPN will not be taking any bets directly.
ESPN Chairman Jimmy Pitaro said in a release that Penn had emerged as the right long-term partner to build an ESPN-branded sportsbook.
“We are confident that the combination of our unparalleled audience along with PENN’s operational expertise and state-of-the-art technology provides us with a tremendous opportunity to serve the ever-growing number of consumers interested in betting,” Pitaro said.
The deal, which will see Penn pay ESPN $1.5 billion in cash over a 10 year period and grant ESPN $500 million in rights to buy Penn shares, sent Penn’s stock soaring as much as 20% in after hours stock market trading.
“This transformative, exclusive agreement with ESPN marks another major milestone in PENN’s evolution from a pure-play U.S. regional gaming operator to a North American entertainment leader,’ said Penn President and CEO Jay Snowden. ‘ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem. ESPN Bet will also benefit from PENN’s operational experience, extensive market access and proprietary technology platform, which successfully debuted in the U.S. this July.”
As for Barstool, Penn is selling the male-oriented digital brand back to founder Dave Portnoy.
In a video posted Tuesday to his account on Twitter, now known as X, Portnoy said Barstool and PENN decided to part ways because the Barstool brand proved toxic, adding that the sportsbook had been denied licenses ‘because of me.’
‘We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” he said.
ESPN had been looking for a partner in the sports betting business for some time, CNBC reported. Last fall, the former Disney CEO Bob Chapek had said ESPN wanted to collaborate with a gambling company.
CORRECTION (Aug. 8, 2023, 7:56 p.m. ET): A previous version of this article mischaracterized ESPN’s new venture. ESPN will be partnering with Penn Entertainment to build a branded sportsbook, not forming a network or taking bets.