Penn National Sports Betting Partnerships Announced

In a press release issued Wednesday evening, Penn National revealed it has reached partnership agreements with four high-profile sports betting providers to launch online sportsbooks and casinos in 16 states pending legislation.

The surprise announcement details partnerships with DraftKings, PointsBet, theScore and The Stars Group to pursue online gambling opportunities in states ranging from New Mexico to Maine.

Penn National Sports Betting Partnership Details

These agreements will grant market access for the four named providers via existing Penn National operations in each state. In return, Penn National will receive cash, equity, market access fees and revenue share from each operator.

In a separate press release issued today detailing Penn National’s latest revenue numbers, CEO Timothy Wilmott further explained how these partnerships work:

“Yesterday, we announced additional details regarding our sports betting and iGaming strategies and businesses. Penn National entered into multi-year agreements with leading sports betting operators DraftKings, PointsBet, theScore, and The Stars Group for online sports betting and iGaming market access across the Company’s portfolio.

“In exchange for access to our non-primary licenses to conduct these operations, Penn National will receive a combination of upfront cash and equity, one-time market access fees, and ongoing revenue sharing. Penn Interactive Ventures will manage these relationships, in addition to controlling the Company’s primary sports betting and iGaming licenses in every state Penn operates.”

Each of the four agreements is detailed below.

Note: Each Penn National sportsbook partnership also includes information on the priority given to each “skin.”

To explain, consider the New Jersey gambling law that allows land-based casinos to operate up to three uniquely-branded betting sites/apps (skins). This explains how Resorts Casino, for example, operates BetStarsNJ.com, DraftKings.com, and ResortsCasino.com all on one license.

Not all states have followed the multi-skins model, however. West Virginia and Indiana also allow each casino to operate up to three skins, while Pennsylvania allows each casino to operate unlimited online gambling skins but just one sports betting skin.

The skin priorities are included below but are dependent on state legislation. Some states may pass legislation allowing operators to launch multiple betting skins while others may limit each to a single skin.

Penn National And DraftKings

DraftKings and Penn National have agreed to a ten-year agreement subject to a ten-year extension. In return for market access, Penn National will receive revenue share based on net gaming revenue.

This partnership is for access to online sports betting and gambling in each of the following states:

• Florida: 1^st skin
• Indiana: 3^rd skin
• Missouri: 1^st skin
• Ohio: 1st skin
• Pennsylvania: 1^st skin
• Texas: 1^st skin
• West Virginia: 2^nd skin

This is a particularly important development for DraftKings in Pennsylvania because it was previously uncertain how DraftKings would enter the PA market after most land-based casinos selected other partners.

With this deal in hand, DraftKings has a path into the PA sports betting market, along with access to other potentially massive states if they ever get around to legalizing online betting. Texas and Florida in particular are full of potential despite facing an uncertain path to legalization.

Additionally, the deal secures access to Indiana, which recently legalized online betting. As for West Virginia, this firms up the deal DraftKings already has in place with Hollywood Casino at Charles Town Races.

Penn National And PointsBet

Penn National and PointsBet have reached a 20-year agreement for market access to five additional states. In return, Penn National will take a 5.28% equity stake in PointsBet, a $2.5 million market access fee for Ohio and more than 10 million options that are exercisable for two years to acquire additional shares in PointsBet.

States covered:

• Indiana: 2^nd skin
• Louisiana: 1st skin
• Missouri: 1^st skin
• Ohio: 1st skin
• West Virginia: 3^rd skin

Penn National And theScore

Sports media company theScore is gearing up for the launch of its own mobile sportsbook. theScore already commands a large presence on the news and media side of the business but is just now getting off the ground when it comes to transitioning into a sports betting provider.

Thus, its 20-year partnership with Penn National is big news for theScore as it grants access to multiple states moving forward.

In return for market access to 11 states pending legislation, theScore has agreed to a revenue-sharing agreement with Penn National. Additionally, Penn National will take a 4.7% equity stake in theScore with the potential to increase that stake in the future.

States covered:

• Indiana: 2^nd skin
• Iowa: 2nd skin
• Kansas: 3^rd skin
• Louisiana: 1st skin
• Maine: 3rd skin
• Massachusetts: 3rd skin
• Michigan: 3rd skin
• Mississippi: 1st skin
• Missouri: 2nd skin
• Ohio: 2^nd skin
• Texas: 2^nd skin

Penn National + The Stars Group

The Stars Group is one of the bigger companies on the international stage but has not made much of the splash here in the US since launching online poker and BetStars in New Jersey, but that is set to change with two key developments.

First, BetStars and FOX Sports announced a major partnership back in May that includes the launch of a new sports betting app to be called FOX Bet. The massive reach of FOX Sports combined with the expertise of The Stars Group should make for a competitive product.

Second, The Stars Group stands to gain access in nine additional states through a 20-year agreement with Penn National. Under this deal, Penn National receives a $12.5 million cash payment upfront, a possible $5 million access fee for Texas pending legislation, a one-time bonus based on net gaming revenue to be paid in 2023, and ongoing revenue share.

In return, The Stars Group can partner with Penn National in the following states:

• Illinois: 1st skin
• Indiana: 1^st skin
• Kansas: 2^nd skin
• New Mexico: 2nd skin
• Maine: 2^nd skin
• Massachusetts: 2^nd skin
• Michigan: 2^nd skin
• Ohio: 1^st skin
• Texas: 1^st skin

Penn National Sportsbook Partnerships Cover 16 of 19 States in it’s Portfolio

These partnerships cover 16 of the 19 states in which Penn National is active. The only three states missing from the list are Nevada, New Jersey and Colorado.

In Nevada, Penn National already has sports betting in place at its three properties and has announced no immediate plans to pursue major changes there.

The same also goes for New Jersey, where Penn National says it is planning on launching sports betting at Freehold Raceway in the near future (although this was said back in December and we haven’t heard much since).

Penn National’s plans for Colorado remain unknown for now. Colorado is set to host a referendum in November in which the public will vote for or against sports betting. If sports betting is approved by Colorado voters, Penn National will have the option to pursue in-person and online betting through Ameristar Black Hawk.