PENN Entertainment executed a pretty newsworthy switcharoo on Tuesday.
Late in the work day, PENN announced it had sold Barstool Sports back to Dave Portnoy while entering into an exclusive agreement with ESPN to launch ESPN Bet in the fall.
The announcement rocked the online gambling industry across the country. It will certainly have a big impact here in Michigan.
While ESPN Bet has been the talk of most of the industry, here in the state it’s newsworthy that a new Michigan online casino will be jumping into the fold because of this deal.
A Hollywood Michigan online casino brand is in the works and will replace the Barstool Online Casino in this state.
PENN bringing Hollywood Online Casino to Michigan
Most of the information that has come out from the agreement has been in regard to the ESPN Bet. It’s a big-money deal that is sure to make an impact on the industry.
The same could be said for the Hollywood Casino rebranding. It’s just less newsworthy around the country because there are fewer states with legal online casinos than those with online sportsbooks.
A shift to Hollywood Casino branding will tie in with Hollywood Casino at Greektown, one of the three retail casinos in Detroit.
“We will have a Hollywood-branded iCasino offering within the ESPN Sports betting platform in all states where online casino is legal,” CEO and President of PENN, Jay Snowden said during PENN’s Q2 investment call. “We thought it was a good time for us to pivot to really focusing on Hollywood casino and the Hollywood brand. The Hollywood brand for us on the brick-and-mortar side is roughly two thirds of our properties. We invest a lot of capital across the portfolio there and so we’re very proud of that Hollywood brand. We think that it creates a really nice linkage from digital online casino, in the five markets that we’re live in today, and that’s going to grow over time.”
PENN announced its goals to launch ESPN Bet sometime during the middle of the upcoming NFL season, shooting for November, but before Thanksgiving.
PENN didn’t specify if Hollywood Casino will be on the same timeline for its launch. Hollywood Online Casino will have its own app in time, but will also have a direct link from ESPN Bet as well.
In Pennsylvania, there is a Hollywood Casino-branded iCasino. It operates under Hollywood Casino Online and PENN Play Casino.
Further regulation may be needed for Hollywood Casino
While PENN Entertainment has a commercial gaming license here in Michigan, it’s unclear if ESPN and Hollywood Casino will need additional regulation to begin operating in the state.
Barstool is listed under “vendor exemptions” by the Michigan Gaming Control Board, while ESPN and Hollywood Casino are not.
The MGCB provided the following on whether PENN and ESPN/Hollywood Casino will need to seek further regulation to launch in Michigan:
It is premature at this time to discuss what additional requirements PENN Entertainment, or any of its affiliates/partners, may have to meet as a result of this announcement.
PENN recently upgraded Barstool platform
Just last month, Barstool underwent scheduled maintenance that left the application of its online sportsbook and online casino down for multiple days.
The maintenance would be for Barstool to begin utilizing theScore media and gaming. Snowden indicated that the upgrade would continue to be applied for the move to ESPN and Hollywood Casino.
“During the quarter as I briefly mentioned earlier, we successfully completed the full-scale migration of our US digital sportsbook and online casino offerings to our proprietary in-house technology platform, which was a huge milestone achievement for our company. The state-of-the-art tech platform continues to drive strong results for theScore Bet in Ontario, and our improved product will provide the foundation for meaningful growth in the US. Once we rebrand to ESPN Bet later this year.”
Barstool not thriving as a Michigan online casino
While Barstool has established itself as a top-five sportsbook in Michigan, its online casino has been further down the list.
Barstool Casino Michigan is eighth in all-time online casino revenue at $116.2 million through June of 2023. That is just 3.2% of the market share here in the state.
The online casino wasn’t heavily promoted or featured by Barstool or PENN. With Portnoy and the gang focused mostly on sports betting, the online casino suffered.
While ESPN certainly brings a powerful name to PENN’s sportsbook portfolio, it’s unclear if Hollywood Casino will bring that same impact.
If this platform upgrade can lead to smooth play for customers, and the ESPN name can be an effective cross-promotion for the Hollywood Casino operation, PENN could see a nice boost in Michigan online casino revenue.
There’s still a lot of Xs and Os to be figured out in the months to come, but it’s still an exciting development for the state.
PENN is motivated to be successful in both online sports betting and online casinos. It could lead to some shifting in the power players in the state’s online gambling industry.
