ESPN and Penn Entertainment have agreed to jointly launch a sports betting business under the brand ESPN Bet, the two companies said on Tuesday.

Shares of Penn gained 20% on the news, while those of DraftKings- one of the top fantasy sports and betting firms – fell 9% in extended trading.

Under the terms, 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.

Jay Snowden, Chief Executive Officer and President of PENN, commented, “This transformative, exclusive agreement with ESPN marks another major milestone in PENN’s evolution from a pure-play U.S. regional gaming operator to a North American entertainment leader. ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem. ESPN Bet will also benefit from PENN’s operational experience, extensive market access and proprietary technology platform, which successfully debuted in the U.S. this July.”

Jimmy Pitaro, Chairman of ESPN, said, “After meeting with Jay and the PENN team, it was clear that they were the right long-term strategic partner to build ESPN Bet into a leading U.S. sports betting platform. We are confident that the combination of our unparalleled audience along with PENN’s operational expertise and state-of-the-art technology provides us with a tremendous opportunity to serve the ever-growing number of consumers interested in betting.”