ESPN has officially entered the sports betting realm, announcing an agreement with Penn Entertainment to launch ESPN BET. 

Penn will be rebranding its current sportsbook and will relaunch as ESPN BET, which will be effective this fall in the 16 legal betting states Penn is licensed.

ESPN’s deal with Penn is reportedly worth $2 billion, according to multiple reports. 

Penn agreed to pay ESPN $1.5 billion in cash over a 10-year period, while ESPN will be granted $500 million of warrants to purchase around 31.8 million common shares of Penn stock in exchange for media, marketing services, brand and other rights provided by the sports media giant. 

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"Our primary focus is always to serve sports fans, and we know they want both betting content and the ability to place bets with less friction from within our products," ESPN Chairman Jimmy Pitaro said in a statement. "The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET."

CEO and President Jay Snowden added, "This agreement with ESPN and collaboration on ESPN BET allows us to take another step forward as an industry leader. 

PENN PURCHASES REMAINDER OF BARSTOOL SPORTS FOR $387 MILLION

"Together, we can utilize each other’s strengths to create the type of experience that existing and new bettors will expect from both companies, and we can’t wait to get started."

As part of this deal, Penn sold Barstool Sports back to founder Dave Portnoy.

"Penn Entertainment and Barstool Sports have gone our separate ways," Portnoy said in a video on X, formerly known as Twitter. "As of this moment, while you are watching this video, I have purchased back Barstool Sports from Penn. That is right: For the first time in a decade, I own 100% of Barstool Sports."

Portnoy said he has "nothing but the most respect" for the Penn team. However, Portnoy admitted being associated with Penn didn’t allow for the content the platform was used to making. 

"The regulated industry probably not the best place for Barstool Sports and the type of content we make," Portnoy said. "Penn was able to broker an unbelievable deal with ESPN. We wish them nothing but the best in their endeavors. It’s truly a win-win.

"For the first time in forever, we don’t have to watch what we say, how we talk, what we do. It’s back to the pirate ship. By the way, I’m never going to sell Barstool Sports. Ever."

ESPN adds that it has "greatly increased multi-platform sports betting content" over recent years, which includes digital programming, radio segments and more to appeal to the everyday sports fan. 

ESPN says it is committed to educate sports fans on "responsible gaming" by keeping its "high standard of journalistic integrity" intact when covering betting, developing its own "committee of responsible gaming" and "implementing responsible marketing policies and guidelines to safeguard fans."

Penn paid an estimated $388 million for total control of Barstool Sports in February after initially buying a 36% stake in the company in February 2020, per Fortune. Penn and Barstool Sports announced their sports betting partnership in early 2020. 

Penn stock moved 23% after hours following the announcement of the new partnership with ESPN.