Penn Interactive Ventures, a wholly-owned subsidiary of U.S. gaming and racetrack operator Penn National Gaming, announced last week that it has jumped into the mobile sports betting and iGaming arenas, inking multi-year deals with four sports wagering operators.
The deals with DraftKings, PointsBet, theScore and The Stars Group give those companies the ability to own and operate “skins” under their own brands in the markets where Penn National operates, offering a cornucopia of real-money online sports betting, poker and casino games.
Penn National has 41 casinos in 19 U.S. states, including eight jurisdictions with legal sports betting and others that are considering legal wagers or have legislation in the wings. The deal doesn’t include Penn National’s retail sportsbooks, which are run by William Hill US.
In a July 31 news release, Jon Kaplowitz, Penn National’s senior vice president of interactive gaming, stated, “We’re pleased to be providing the top names in sports betting, iGaming and poker access to our company’s non-primary licenses to conduct these operations in exchange for a combination of upfront cash and equity, one-time market access fees and ongoing revenue sharing.”
According to Penn National, operators will have the option to launch a first, second or third skin in the markets where the company has a presence subject to license availability, state law and regulatory approvals in those markets.
“Sports betting represents an exciting new growth opportunity for Penn National,” Kaplowitz continued. “Our skin agreements will help fund the cost of launching and maintaining our primary sports betting and iGaming operations, both by way of the upfront consideration and the long-term revenue-sharing arrangements, which are consistent with industry standards and subject to minimum guarantees.
“By controlling our front-end product and relying upon our new partnership with Kambi for managed-trading services, we can create a lasting and differentiated online and retail product experience for our customers,” Kaplowitz stated.
He pointed to the company’s recent iGaming launch in Pennsylvania, where the company was first in line to accept legal wagers. “We will be launching our first in-house retail sportsbooks at our Iowa and Indiana properties in the coming weeks,” he added.
The agreements with the four companies include terms ranging from 10 years with the option for a 10-year extension (DraftKings) to 20 years for the others.
Kambi is the technology provider of choice for sports betting in states with active sports betting legislation and will integrate its platform ahead of a roll-out in these jurisdictions, according to CDC Gaming Reports.
“Kambi’s strategy has always been to partner with tier one operators, particularly those that share our vision and passion for sports and sports wagering,” Kambi CEO Kristian Nylén said of the deal. “In Penn National, we have found an ideal partner—one that is not only passionate about providing high-quality sports wagering experiences to its customers, but a company that adheres to the highest level of ethical business standards.
“It’s an honor for Kambi to be working with an organization of the size and stature of Penn National, and we look forward to helping them become a national leader in the U.S. sports betting market in the coming years.”
Telsey Advisory Group said the new partnerships are a plus for Penn National, but “might be a bigger negative for other operators.”
“We think they will make it more difficult for other more traditional operators such as MGM to be able to take share,” the group cautioned. “A major component of the transaction will also depend on the revenue share and the success of the partners in each of the states.”
