Penn National Announces New Sports Betting Deals With 5 Companies
On Wednesday, Penn National Gaming announced five new partnerships in connection with the burgeoning sports betting marketplace in the United States. The company is set to take charge of several new multi-year agreements with companies involved in the always-growing sports betting industry.
The casino operator announced new deals with sports betting entities DraftKings, theScore, PointsBet, and The Stars Group. Penn Interactive Ventures, a subsidiary of Penn National, will manage the relationships between the companies. Additionally, they announced a partnership with Kambi Group, a sports betting technology provider. Kambi Group has signed on to run Penn National’s sports gambling and online gaming products.
The terms of the agreement say that the other operators will be permitted to provide their products as “skin” partners. Under the agreement, they will have the ability to “own, operate and brand real-money online sports betting, poker and casino offerings” in certain states that grant licensing for such things.
A press release issued by the company’s Senior Vice President, Jon Kaplowitz, 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 return, Penn National will send “upfront cash and equity, one-time market access fees and ongoing revenue sharing.”
Details of the Deals
DraftKings, the most well-known new partner for Penn National, will be able to provide its daily fantasy and sports betting services as a skin in Indiana, Florida, Missouri, Texas, Pennsylvania, Ohio, and West Virginia. The partnership between the companies is set to last for 10 years with an option to add an additional 10 years if both sides agree to do so. DraftKings will also share a chunk of its net gaming revenue with Penn National.
This deal means DraftKings will be entering the Pennsylvania market, which rival FanDuel did earlier this week. DraftKings had reportedly been looking for a way to break into the state, and Penn National has afforded them that opportunity. Ezra Kucharz, the CBO of DraftKings, said in a statement,
“With dozens of states having already legalized sports betting or posed to do so in the near future, this expanded partnership ensures DraftKings is positioned to quickly enter new markets. Penn National Gaming brings tremendous resources, people and experience to the partnership and, as we finalized the terms of the deal, it was abundantly clear there is a real synergy between our two companies that bodes very well for the future.”
The PointsBet agreement is a 20-year pact, and it will allow PointsBet to serve as a skin to provide services in Missouri, Ohio, Louisiana, West Virginia, and Indiana. Penn National will also receive a share of PointsBet’s revenue with a 5.28% equity stake in the company as well. The company will also hold the option to buy additional shares of PointsBet down the road.
The pact with theScore is also a 20-year agreement, and theScore will be able to operate under the same terms in Kansas, Maine, Massachusetts, Louisiana, Iowa, Indiana, Michigan, Mississippi, Ohio, Missouri, and Texas. Penn National will get a share of theScore’s revenue from each of those states with a 4.7% equity stake in the company. There is no mention of a potential option to buy more shares, however.
The agreement with The Stars Group is another 20-year contract, and The Stars Group will operate under the Penn National name in Massachusetts, Michigan, Ohio, Texas, New Mexico, Illinois, Kansas, Indiana, and Maine. The Stars Group will pay over $12 million up front with an access fee of $5 million just for Texas. Penn National will get a share of the revenue from each of the aforementioned states.
Kambi Group’s Involvement
The Kambi Group will become Penn National’s exclusive sportsbook partner. Kambi will operate the online retail and online sports betting operations in states in which the casino owns land-based properties. Penn National is expected to launch its first sports betting operations sometime in the third quarter of this year. The first focus will be on the company’s casino properties in Iowa and Indiana, both of which legalized sports betting earlier in 2019.
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