ESPN is ready to play the odds
ESPN will launch ESPN Bet in 17 states today, hoping to break through the already crowded sports betting market.
Its partner, Penn Entertainment, will pay ESPN $2 billion in cash and stock over the next 10 years to slap ESPN branding on its online and brick-and-mortar operation previously known as Barstool Sportsbook. Penn ended a similar agreement with Barstool Sports to team up with ESPN and looks to be chasing its losses—the company left its Barstool partnership $923 million in the hole, according to information filed with the Securities and Exchange Commission.
What could make this partnership profitable?
When it comes to market share over the past 12 months, it’s FanDuel (36%), DraftKings (33%) and everyone else. ESPN Bet is acquiring Barstool’s 3% share, believing it can flourish, even though Fox Bet, the sports-betting venture of another TV network, and other sportsbooks closed up shop recently.
ESPN and Penn outlined how they think ESPN Bet can become the Worldwide Leader in Sports Betting through...
Content integration. It started last night with the Monday Night Countdown pregame show and will likely never, ever end.
Potential existing clients. ESPN has 20 million fantasy sports users who could be converted into sports bettors (if they’re not already).
Ad blitz. When sports betting became legal in 2018, it felt like there was no escaping sportsbook commercials. ESPN could deploy that strategy again.
Penn CEO Jay Snowden said he’d like to use Disney’s available retail space as well, which is good news for gamblers hoping to one day place a three-team parlay at the Magic Kingdom.
What about ethics? ESPN is taking measures to avoid shenanigans by forbidding its insiders to bet on the sports they cover or appearing on the network’s daily gambling show. Among the many rules for its 5,000 employees: No betting on draft picks, which could be a direct response to The Athletic insider and FanDuel partner Shams Charania tweeting ultimately incorrect information that shifted betting lines ahead of the NBA draft this year.