Penn and Disney's ESPN sign a $2.6 billion agreement to start a sports betting company.

ESPN, a division of Walt Disney, and casino owner Penn Entertainment have decided to begin a sports betting operation under the name ESPN Bet together, the two firms said on Tuesday. As a result of the announcement, shares of Penn increased by 20% while shares of DraftKings, one of the major fantasy sports and betting companies, decreased by 9% in extended trade. According to the agreement, Penn will provide ESPN the brand, promotional services, and other rights in return for US$1.5 billion (S$2.02 billion) in revenue and US$500 million value of warrants to buy the company's shares over a 10-year period.