In the world of sports betting, Pennsylvania is now fit for a king.
The sports betting realm, like royal watchers, have been speculating how DraftKings would break into the state’s scene. Especially, since FanDuel is already live. We got our answer this week.
DraftKings partnering with Penn in PA
In a July 31 press release, Penn National Gaming, the largest regional gaming operator in North America, announced it entered into multi-year agreements with top sports betting operators for online sports betting and iGaming market access across the company’s portfolio.
DraftKings is the only one of the group gaining access to Pennsylvania.
The partnership of powerhouses includes:
- The Stars Group
“Sports betting represents an exciting new growth opportunity for Penn National,” said Penn National’s Sr. Vice President of Interactive Gaming Jon Kaplowitz. “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.”
DraftKings home at The Meadows
The Meadows Casino in Washington County will serve as DraftKings’ PA sports betting home. There is no projected date for the opening of a brick-and-mortar sportsbook or for the launch of an online sportsbook.
Pennsylvania Gaming Control Board (PGCB) spokesperson Doug Harbach confirmed late Wednesday that The Meadows applied for a $10 million sports betting license earlier this month. He also verified PGCB must approve DraftKings as an operator for sports wagering.
The expansion builds upon Penn National Gaming and DraftKings earlier West Virginia market access deal, which was announced in Dec. 2018. DraftKings’ additional market access is exclusive to Penn National Gaming across certain states in which Penn National Gaming operates casino properties. Since launching in New Jersey, DraftKings has accepted more than 21 million bets and paid out over $650 million in winnings to customers.
DraftKings Chief Business Officer Ezra Kucharz commented on the continued partnership:
“With dozens of states having already legalized sports betting or poised 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.”
Is Penn National still partnering with William Hill?
Penn National has been serious about sports betting in Pennsylvania since the beginning. It was first to apply for a sports betting license and first to receive approval. It launched the first sportsbook in Pennsylvania at Hollywood Casino in Nov. 2018 with partner William Hill.
The latest news from Penn National does not mention William Hill. This does not necessarily mean Hollywood is ditching William Hill for DraftKings.
But even though this (Draft)King found a throne in Pennsylvania, it’s not immune to “royal” gossip.
More on the Penn/DraftKings deal
Pennsylvania is not the only state in the deal with the two companies. Under the terms of Penn’s various agreements, each “skin” partner will have the option to own, operate, and brand real-money online sports betting, poker, and casino offerings in each of the states outlined below. These deals are pursuant to a first, second or third skin, as applicable, and subject to license availability, state law, and regulatory approvals.
DraftKings terms of agreement with Penn National Gaming
- Florida (1stskin)
- Indiana (3rd skin)
- Missouri (1st skin)
- Ohio (1st skin)
- Pennsylvania (1st skin)
- Texas (1stskin)
- West Virginia (2nd skin)
The agreement is for 10 years subject to a 10-year extension. The deal also includes a revenue share to PNG based on net gaming revenue.
Kambi scores big win
In concert with the bombshell announcement, Kambi announced it will be the long-term exclusive sports betting supplier to Penn National. Kambi provides sports betting services to licensed gaming operators.
Kambi currently supplies the odds to three of the four online sportsbooks in Pennsylvania:
“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,” commented Kaplowitz.
The agreement is not expected to have a material impact on Kambi’s 2019 revenues. However, it has the potential to have a significant effect on its revenues in future years.
Kambi’s Chief Executive Officer Kristian Nylén commented:
“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. 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.”