Sports broadcaster ESPN announced Tuesday it has signed a licensing deal with Penn Entertainment to create a branded sportsbook for US audiences that will launch later this year.
Penn will rebrand its current sportsbook in the 16 states where it is licensed to ESPN Bet, with the change impacting its website, mobile app and retail locations.
Audiences will be able to place wagers through ESPN digital products.
"Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products," ESPN chairman Jimmy Pitaro said.
"The strategy here is simple: to give fans what they've been requesting and expecting from ESPN."
Under the deal, Penn has agreed to pay the ESPN $1.5 billion over 10 years and grant the Disney-owned broadcaster $500 million of warrants to buy about 31.8 million shares of Penn stock with options for more depending on ESPN Bet's performance, according to a press release.
ESPN Bet will serve as the network's exclusive sportbook and become part of programming and content integration later this year.
The deal marks ESPN's latest move in sports gaming, with the network already offering daily bet-focused shows on multiple platforms and odds displayed on programs and websites.
Penn has online sportsbook licenses in Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia.
The American Gaming Association estimates that $93.2 billion was bet at sportsbooks last year, a 63% increase from 2021, with legal sportsbook revenue at $7.5 billion in 2022.
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