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Penn National Deal Gives A Sneak Peek To Massachusetts Sports Betting Possibilities

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Mass sports betting sneak peek

Nobody knows for sure when or even if Massachusetts sports betting will become legal. Two sportsbooks have placed their wagers on that being inevitable in a new Penn National Gaming deal.

The deal means Massachusetts residents should have access to these two brands if/when sports betting in Massachusetts is legalized. There may be others, but these two operators now have an inside track.

Penn National deal with two prominent sportsbooks

Penn National Gaming, which operates Plainridge Park Casino, has announced new market access deals. Among the five companies involved are theScore and The Stars Group.

The Stars Group is the world’s largest online gaming company. It will now have access to Penn’s market in Massachusetts for its casino games and if/when it should become available, mobile sports betting as well.

TheScore is a media company that has recently ventured into sports betting. The new contracts give the Stars Group second priority in securing an online “skin” (license with branding) to operate a sportsbook in Massachusetts in conjunction with Penn.

TheScore gets the third priority in Massachusetts as a result of its contract. Penn reserves the right to sell the first priority or use it itself in the deal.

Kambi, a United Kingdom-based company that provides operation software and other infrastructure for sportsbooks, is part of the deal. It will operate the sportsbook for Penn National if it chooses to run its own brand — which it almost certainly will — in the state.

As much of the deal is based on contingencies, there is much that still has to play out.

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Stars Group and theScore face some uncertainty

In order for a primary skin-holder along with the Stars Group and theScore to all operate in Massachusetts, any future law would have to allow licensees to operate with at least three skins. That may not be the case.

If an eventual framework only allows licensees to register just one or two skins, at least one of the parties to the Penn National deal would be left out in the cold.

There’s also a possibility that a framework like that which currently exists in New York could emerge. Mobile betting remains illegal in the Empire State.

If that occurs, even just temporarily, the Stars Group would take a hit on its investment. To get into the markets including Massachusetts, the Stars Group ponied up $12.5 million and agreed to a revenue share.

Missing out on Massachusetts wouldn’t be as devastating for theScore. Its entry fee was giving up 4.7% in equity share and agreeing to a revenue share.

The number of possibilities for what the eventual landscape could look like in Massachusetts is huge. This deal assures that Penn National, theScore and the Star Group have a vested interest.

Lobbying pressure for sports betting may increase

In 2012, Penn National spent $60,000 lobbying the Massachusetts legislature to legalize casino games. That could happen again.

The sports betting revenue shares that Penn stands to gain won’t amount to much if the Massachusetts Legislature continues to drag its feet on legalization. Penn may end up hiring more lobbyists to apply new pressure to legislators.

If that pressure hastens the oncoming of Massachusetts sports betting, all the companies involved in this deal would be the beneficiaries.

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About

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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