Penn Confirms Interest in Offering Sports Prediction Markets

It appears Penn Entertainment is looking to take on a new industry.

The ESPN Bet operator has confirmed that they are closely monitoring the growth of sports prediction markets. These controversial trading platforms allow users to purchase “contracts” for a team or athlete to win an event. This setup helps these markets avoid being classified as gambling, allowing them to operate in states where sports betting remains illegal.

While these markets are quickly gaining popularity, their legal status is under fire from several sides. Multiple states have sent cease-and-desist letters to operators, and the NBA recently warned about the dangers of prediction markets. This has left the future of this platform in doubt, but that isn’t stopping Penn from taking an interest.

“It’s not priority one for us, we’ve got a lot in front of us in terms of execution and delivering on guidance for the remainder of the year. But we’re staying close to it, and if it ends up as an opportunity for the industry, you can expect us to be participating,” Penn CEO Jay Snowden shared in an earnings call.

Penn will likely wait for the Commodity Futures Trading Commission (CFTC) to formally rule on the status of prediction markets. The federal regulator covers trading platforms, including sports prediction markets.

Is Penn Done With ESPN Bet?

Penn’s talk of prediction markets comes as ESPN Bet continues to struggle. Despite having one of the biggest brand names in sports, the online sportsbook has been unable to capture much market share. 

As the sportsbooks approach their third anniversary, Penn must decide whether to continue with the platform. Snowden has shared that the operator is considering all options, including closing ESPN Bet.

Penn’s interest in sports prediction markets may indicate that they are preparing to move on from the troubled sportsbook. Given their failure with Barstool Sportsbook, it isn’t surprising to see the operator looking to break into a new industry.