Penn Entertainment soars on plans to launch sports betting business with ESPN

EBET

09/08/2023 10:32

** Shares of Penn Entertainment  PENN.O  jump 12.5% to $28
premarket after the casino owner and Walt Disney's ESPN  DIS.N 
agree to launch a sports betting business under the brand ESPN
Bet
    ** Walt Disney  DIS.N  gains 0.9%, while DraftKings  DKNG.O 
- one of the top fantasy sports and betting firms - drops 5.6% 
    ** Penn will pay ESPN $1.5 billion in cash and offer about
$500 million worth of warrants to purchase its shares over an
initial 10-year term in exchange for the brand, promotional
services and other rights
    ** "The issues remain as to the magnitude of share given the
later entry, as well as the competitiveness of product
advancement, which has been the current success driver rather
than eyeballs," Jefferies analysts said in a note
    ** Penn, which in February completed an acquisition of
Barstool Sports, also announced on Tuesday that it had sold 100%
of Barstool Sports common stock to Barstool founder David
Portnoy in exchange for certain non-compete, other restrictive
covenants
    ** Penn set to host post-earnings call at 9:00 am ET
    ** Small-cap sports betting company Esports Entertainment
 GMBL.O  jump 23% to 30 cents and Ebet  EBET.O  12.5% to 3 cents
    ** PENN shares down 16.4% YTD 
    

 (Reporting by Sruthi Shankar)
 ((sruthi.shankar@thomsonreuters.com;))