ESPN Signs 1st Sports Betting Deal as Penn Sells Back Barstool to Dave Portnoy
Well, it finally happened. ESPN has entered into the sports betting fray with its first sports betting deal. Penn National agreed to make $1.5 billion in cash payments over 10 years to ESPN. And it will be interesting to see how the largest sports network will cover the sector sports betting sector. Up until now, David Payne Purdum has served as the Walter Cronkite of the sports betting news world for ESPN and is widely regarded in the industry.
Media outlets seem less willing to report on scandals involving the gambling sector. How many reported on the massive customer database breach tied to DraftKings and BetMGM late last year? We didn't see anything reported on The Athletic.
Two years ago The Athletic entered into a sports betting media deal with The Athletic. It's doubtful that media outlet will report anything related to the latest controversy surrounding BetMGM and its refusal to pay a Fairfax County teacher his more than $200,000 in winning bets. Local media outlets and a number of gambling news sites and blogs, Gambling911.com included, have raked BetMGM through the coals over its unexplained voiding of the bets they claimed were an "obvious error".
The bet was a parlay with all three legs coming through, not the easiest of feats. In this situation it's not unreasonable to believe the customer through the 60-1 odds were accurate. Gambling911.com was in the process of reaching out to this gambler to determine what actions he may pursuit. We've also reached out to the Virginia Lottery, which oversees sports betting in the commonwealth. They were fully unaware of BetMGM's actions and are currently investigating this matter.
The Athletic, we would note, was among the first media outlets to report on ESPN launching its own sportsbook in the fall.
So will ESPN continue to cover the sports gambling industry without worrying about potentially upsetting an advertiser?
Up until now negative news surrounding Penn National has mostly focused on the controversies surrounding Barstool Sports and its colorful personalities led by Dave Portnoy. That's one headache ESPN won't have to deal with. Penn just sold Barstool Sports back to Portnoy for 50% of gross proceeds in the event of a future sale or monetization event. The company paid $551 million to buy Barstool.
We underestimated just how tough it is for myself and Barstool to operate in a regulated world," Portnoy said in a video announcement.
"Every time we did something, it was one step forward, two steps back. We got denied licenses because of me. You name it. So the regulated industry probably not the best place for Barstool Sports and the type of content we make ... I am never going to sell Barstool Sports ever. I'll hold it 'til I die."
Ben Mintz, who Penn National fired for racial insensitivity after repeating lyrics of a song, is now rehired as well.
Per the new arrangement between Penn National and ESPN, Barstool Sportsbook will now be rebranded as ESPN BET and available in the 16 legalized betting states where PENN Entertainment is licensed.
A source tells Axios that the deal doesn't prohibit ESPN from selling ad space to rival digital sportsbooks like DraftKings or FanDuel.
ESPN BET comes onto the scene just as Fox sportsbook, Fox Bet,is in the process of shutting down.
- Gilbert Horowitz, Gambling911.com
