ESPN Bet’s First Retail Sportsbook on the Way, Overall Rollout Delayed

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Penn Entertainment has announced it will open its first ESPN Bet retail location in April (renderings pictured).

The first physical ESPN Bet venue will join the list of Michigan retail sportsbooks, taking over the former Barstool Sportsbook spot at Penn’s Hollywood Greektown Casino in Detroit.

At the same time, Penn also extended its contract with Kambi to supply retail sports betting services while it migrates to its in-house platform for ESPN Bet retail ‘books.

The contract was set to expire in late 2024, but will now extend until 2025. That gives Penn more time to build physical ESPN Bet locations.

Penn operates 32 retail betting locations in total. Most are now branded depending on their casino. But some still use Penn’s previous Barstool Sportsbook branding.

“We’re thrilled to announce that our market-leading sportsbook Hollywood Casino at Greektown will debut as the first ESPN Bet-branded sportsbook in our portfolio,” Penn Entertainment CEO and President Jay Snowden said in a press release.  

“Together with ESPN, we look forward to expanding the ESPN Bet brand with our premium retail sportsbooks and creating unique omni-channel experiences at key Penn properties across the country.”

Retail Rollout Extended

Penn chose one of the only states where its Barstool Sportsbook was the leading retail location to debut its ESPN Bet book.

Hollywood Greektown Sportsbook was the most popular sportsbook of those at the three Michigan casinos in Detroit throughout 2023. It made a $71 million handle and $6.7 million in revenues.

The press release was light on the details of what would be included at this specific sportsbook, set to open in April.

Penn did say that ESPN Radio staff would be hosting live broadcasts from its retail sportsbooks as they open throughout the year.

As well as announcing the first ESPN Bet retail venue, Penn probably wasn’t happy to announce the delay of the physical rollout by up to a year.

One company that was happy to break the news was Kambi.

The European sports betting platform provider has negotiated a steady revenue share agreement with Penn until the end of 2025.

That means any locations moving over to ESPN Bet, like Hollywood Greektown will do in April, will continue to pay Kambi a share of revenues until all locations are transferred over.

“As the industry’s leading sportsbook provider, both online and in retail, we are committed to providing our partners with cutting-edge technology and a premium service, which Penn’s vast retail estate will continue to benefit from throughout the duration of the extended contract,” Kambi said.

Penn’s Expenses

That’s just another cost for Penn at this point. It has invested heavily in ESPN Bet, to the point it made a $358 million loss for Q4 2023.

Physical casino growth was the sole saving grace for Penn in its recent earnings announcement, so the news it is beginning to extend its new flagship sports betting brand into its physical locations will be welcome.

However, retail betting is typically a very small slice of the pie compared to online betting.

In fact, there’s only one U.S. market where retail betting is more popular than online, which is in Washington D.C – and for its own very particular reasons.

So Penn shouldn’t be relying on launching on ESPN Bet retail ‘books to calm investor nerves. Share prices are currently tumbling, down nearly 20% since last week’s release of its earnings report.

They’re also down some 40% in the past 12 months, despite rallying some when ESPN Bet launched showing early promise.

On the other hand, ESPN Bet’s market share has been solid. It did smash app download records, and it has made more revenue than Penn’s previous Barstool venture. It also just purchased a New York sports betting license pending regulatory approval, which means it can soon launch in the nation’s largest market.

“Growing the ESPN Bet brand is essential in increasing our market share and ultimately reaching a podium position,” said company President Mike Morrison in a press release.

“Our commitment to that shows in a variety of ways from new markets to our first retail presence, and we cannot wait to open ESPN Bet inside Hollywood Casino at Greektown for fans in Michigan ahead of some key sporting events.”

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