It has been relatively smooth sailing since sports betting in Kentucky launched back in September, and at a meeting of the Kentucky Horse Racing Commission Sports Wagering Advisory Council earlier last week, action was taken on a rebranded sportsbook and inclusion of multiple new offerings to the state’s sports betting menu.
ESPN BET Gets Approval
Before we get to the ESPN BET saga, we should point out that the following sports leagues have gained approval from the Kentucky Horse Racing Commission to appear on sports betting menus across the state:
- Athletes Unlimited basketball, lacrosse, softball, and volleyball
- NCAA volleyball
- UFC Contender Series
- NBA 2K League
Penn Entertainment has been going state by state to rebrand its Barstool Sportsbook to ESPN BET and Kentucky was the latest to give the switch its permanent stamp of approval. On November 14th KHRC Executive Director Jamie Eads gave temporary approval to Penn to allow it to rebrand its sportsbook to ESPN Bet and one week later that status was changed to permanent.
The Original Sale
The Pennsylvania-based company paid somewhere in the neighborhood of $600 million to buy the anti-cancel culture Barstool sports media outlet with the primary intention of using the brand name as its mobile sports betting app.
The media portion would act more as a marketing wing of the sportsbook with its controversial founder, Dave Portnoy, aka El Presidente, still on the payroll to rally his fanbase around the brand’s new sports betting platform.
However, upon completion of the deal in February, another attractive offer came along that was too good to ignore. Penn Entertainment agreed to pay ESPN $1.5 billion over 10 years simply for the right to use the sports media giant’s name.
“After meeting with Jay (Snowden – Penn CEO) and the PENN team, it was clear that they were the right long-term strategic partner to build ESPN Bet into a leading U.S. sports betting platform,” said ESPN President Jimmy Pitaro in a release.
Barstool Gets the Boot
Unfortunately, the agreement came with another costly condition that mandated Penn Entertainment divest itself of the controversial Barstool brand before the deal with ESPN was consummated.
With precious little time before the lucrative NFL and college football seasons kicked off, Penn Entertainment sold the Barstool brand, sans the sportsbook, back to Dave Portnoy for the princely sum of $1 with the stipulation the company receives 50% of the proceeds should he ever sell it.
It was a mind-blowing coup for Portnoy who closed on an asset for approximately $600 million in February only to get it handed back to him in August, less than six months later, for less than a cup of coffee. Although it was a bitter pill for Penn to swallow, it was a necessary evil if it wanted to gain access to the biggest sports media brand name in the world.
After deciding to part with Barstool and welcome ESPN into the fold, Penn CEO Jay Snowden said, “Barstool has been a great partner and we are thankful to Dave Portnoy, Erika Ayers, Dan Katz, and their team for helping to rapidly scale our digital footprint across 16 jurisdictions in the U.S. and introducing their audience to our retail and digital products. The divestiture allows Barstool to return to its roots of providing unique and authentic content to its loyal audience without the restrictions associated with a publicly traded, licensed gaming company.”