Penn National Taps Into US Sports Betting with Five Major Deals
Through its wholly owned subsidiary Penn Interactive Ventures, Penn National will manage the newly penned multi-year, multi-state agreements that all involve the provision of online sports betting and online gaming services.
In a press release issued Wednesday, Penn National announced that it has entered into agreements with sports betting operators DraftKings, PointsBet, theScore, and The Stars Group. Penn Interactive Ventures will manage the newly established relationships.
In addition to joining forces with the major operators, Penn National also announced that it has inked an agreement with sports betting technology provider Kambi Group, under the terms of which the latter would power the company’s primary sports gambling and online gaming ventures.
Under the terms of the agreements with the four sports betting and online gambling operators, they will all be able to provide their products as “skin” partners of Penn National. They will have the option to “own, operate, and brand real-money online sports betting, poker, and casino offerings” in select states, subject to license availability, laws and regulations in each of the states the partnerships have been signed for, as well as regulatory approvals. The operators will be able to operate as a first, second, or a third skin.
Penn National’s Four New Online Gambling Partners
Of their partnerships with top-tier operators, Jon Kaplowitz, Senior Vice President of Penn National’s interactive gaming division, said that they are “pleased to be providing the top names in sports betting, iGaming and poker access to our company’s non-primary licenses” in exchange for “upfront cash and equity, one-time market access fees and ongoing revenue sharing.”
Under the terms of the agreement with DraftKings, the sports betting and DFS operator will be able to provide its services as a Penn National skin in Florida, Indiana, Missouri, Ohio, Pennsylvania, Texas, and West Virginia. The partnership has a 10-year term with the option for a ten-year extension. DraftKings will be sharing a portion of its net gaming revenue with Penn National.
Under the terms of a 20-year partnership with theScore, the latter would be able to operate in Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Missouri, Ohio, and Texas, while Penn National will receive a share of its revenue from those states. The casino operator will also acquire a 4.7% equity stake in theScore.
Last but not least, the 20-year deal with The Stars Group will see the online gambling giant gain access to the gambling markets of Illinois, Indiana, Kansas, New Mexico, Maine, Massachusetts, Michigan, Ohio, and Texas.
Penn National will receive a $12.5 million upfront payment from The Stars, with an additional access fee of $5 million for Texas. The casino operator will also receive a share of its partner’s revenue in the above-mentioned states, with a one-time bonus based on net gaming revenue in 2023.
The agreement with Penn National will provide The Stars with the chance to penetrate multiple US states, and returning to the United States after the Black Friday nightmare a few years ago has been an essential part of The Stars’ growth strategy.
The Kambi Deal
Aside from reaching agreements with four major digital betting and gaming operators, Penn National also announced today that it has signed a deal with Kambi Group, making the European sports betting technology provider its exclusive sportsbook partner across multiple states.
Under the terms of the deal, Kambi’s platform will power Penn National’s retail and online sports betting operations in the states where the casino company owns properties.
The first sports betting launches are set to take place in the third quarter of the year. The initial focus will be on Penn National’s brick-and-mortar casinos in Iowa and Indiana, where sports betting was legalized earlier this year. The launch of online betting operations will follow in 2020.
Mr. Kaplowitz said that sports betting represents an “exciting growth opportunity” for Penn National and that utilizing Kambi’s betting technology and related services will allow them to “effectively capitalize on this strategy.”