ESPN Bet, Giant Disney Wakes Up And Smells The Lure Of US Sports Betting
Just as US sportsbook leaders FanDuel, DraftKings and BetMGM are about to go positive, after years of pioneering spade work and spending billions to capture market share, entertainment giant Walt Disney has finally decided to enter the fray to conquer the world’s most difficult and lucrative betting bazaar.
Late to the party or game changer?
That’s the question now vexing observers as Disney avatar ESPN–the largest sports media brand in the US–goes live this week across 17 states as ESPN Bet, a US$1.5 billion (£1.2bn) joint venture with PennBet, the newly-rebranded online sportsbook operated by Penn Entertainment.
Penn, having divested itself of previous partner, the controversial, sex pest-accused Dave Portney of Barstool Sports fame, will operate ESPN Bet; while ESPN promotes the app across its myriad digital and terrestrial platforms.
On paper it’s an iGaming marriage made in heaven: The power of Disney, heft of ESPN–perhaps the most trusted sports brand in America–and digital expertise of Penn Entertainment.
Or is it?
Flutter-owned FanDuel, Massachusetts-based DraftKings and BetMGM, a joint venture between MGM Resorts International and the UK’s Entain, have all been forged in the fire of fierce competition and furnace of what is still essentially a brand new online betting capture for the American market.
All three are now on the cusp, according to their latest third quarter financial reports, of going into long-awaited sustained profit in the new year.
Ever since the US Supreme Court repealed PASPA in 2018–the Professional and Amateur Sports Protection Act, which outlawed betting on sports in most states–, running a sportsbook has not been for the faint-hearted.
Sportsbetting is now legal in almost 40 of the USA’s 50 states (as well as the key Canadian province of Ontario), with only California and Texas the two big hold-outs.
Today one-in-five Americans say they have bet on sports, and some US$220 billion (£177.16bn) has been legally wagered on sporting outcomes by US punters since the repeal of PASPA.
Only last month New York state, with eight top sportsbooks competing for custom, smashed the US$2 billion (£1.61bn) monthly betting handle.
Evolution
ESPN Bet, effectively, is a rebranding of Penn’s Barstool sportsbook, which the company sold back to its founder Portnoy in August for the peppercorn sum of US$1.
Apart from stating the obvious “excitement” of launching the old-new app, Penn Entertainment CEO Jay Snowden promised:
“This strategic alliance is expected to further expand our digital ecosystem and drive re-engagement with the millions of customers in our digital and retail databases, leading to compelling cross-sell opportunities.”
The Penn-ESPN Bet brand will, initially, run for a decade — with the option of extending another 10-years if all goes well.
“We began looking at the sports betting space in 2018, ahead of the repeal of PASPA,” said Mike Morrison, ESPN Vice President Sports Betting and Fantasy.
“We had some sense that things could change and we began to tee up a strategy and process about how ESPN might get involved in sports betting.
“This is really just the next step in the process for us. We feel at this point there’s enough national attention and interest.
“Being able to reference betting odds is a fundamental part of telling the story of the game that’s about to happen. Who’s the favorite, who’s going to win, by how much, what’s the expectation?”
Punters will now be able to gamble through the ESPN Bet app in New Jersey, Pennsylvania, Massachusetts, Illinois, Ohio and Arizona among the initial 17 launch states.
With over 105 million monthly unique digital visitors, a massive social media presence–it has 41 million TikToK followers, for example–and 25 million subscribers to its streaming service, ESPN is a leviathan of the US sports media scene.
But in sports, as in life, there is no such thing as a sure bet.
To date the only guaranteed winner has been laughing boy Dave Portnoy, the man who sold his company for US$550 million (£442.9m) to Penn Entertainment and bought it back for 100 pennies.
