The long-awaited, perhaps overdue, launch of ESPN Bet is coming soon. And it is expected to debut in the Ohio sports betting market.
Sources told Legal Sports Report’s Mike Mazzeo that “ESPN Bet is trending toward a mid-November launch.” While the Worldwide Leader has not confirmed anything in an official capacity, this aligns with messaging from Penn Entertainment, with whom they’re partnering. Previously PENN CEO Jay Snowden said the company hoped to finish their transition from Barstool Sportsbook to ESPN Bet sometime “before Thanksgiving.”
This is, in many ways, a moment for which many in the industry have been waiting. It was always a matter of time before ESPN entered the United States online sports betting market. Truthfully, the company held out longer than most assumed. Ties to Disney, ESPN’s parent company, no doubt slowed the inevitable. Disney has often tried to brand itself as a family business. Plenty of higher-ups have been concerned about the optics of entering the gambling industry.
Apparently, those concerns are now assuaged. Well that, or they are secondary to the revenue ESPN is hoping to recoup. But what is ESPN Bet? Where will it launch aside from The Buckeye State? And what challenges await the app as they try to effectively offer sports betting in Ohio? Let’s get into it.
What Exactly is ESPN Bet?
The deal between ESPN and Penn Entertainment is somewhat complex and includes many layers. However, Mazzeo succinctly summed up their agreement for LSR.
“In August, Penn Entertainment struck a 10-year, $2 billion deal, via cash and stock, with ESPN for the media giant to lend its name to an online sports betting platform,” he wrote. “Penn ended its relationship with Barstool Sports to facilitate the ESPN arrangement.”
So, in essence, ESPN Bet is an ESPN-branded sports betting application that will be operated by Penn Entertainment. The WorldWide Leader is effectively receiving a revenue infusion in exchange for lending their name, which is synonymous with everything sports.
Penn Entertainment, meanwhile, is gaining a recognizable face. Though they operate tons of casinos and have a sports betting reach across 20-plus states, their partnership with Barstool Sports failed to gain traction. Penn Entertainment kept forfeiting market share in basically every state it operates to heavyweights such as FanDuel and DraftKings. Their hope is that ESPN’s brand recognition will draw in more users and, by extension, yield higher market shares. To help maximize accessibility, Penn Entertainment plans to launch ESPN Bet in 16 states. Here’s the complete list, according to Sports Betting Dime:
- Arizona
- Colorado
- Illinois
- Indiana
- Iowa
- Kansas
- Louisiana
- Maryland
- Massachusetts
- Michigan
- New Jersey
- Ohio
- Pennsylvania
- Tennessee
- Virginia
- West Virginia
Ohio looms as the most important of these destinations. Penn Entertainment does not have a license to offer sports betting in New York. Meanwhile, sports betting in California, Texas and Florida remains illegal. That leaves Ohio as the biggest market in which ESPN Bet will debut, though Massachusetts certainly has a case.
Will ESPN Bet be a Force in the Ohio Sports Betting Market?
Establishing a strong presence in Ohio will be key to optimizing the partnership between ESPN and Penn Entertainment. Notably, their agreement includes an opt out after three years if they cannot establish a 10 percent market share.
Initially, a 10 percent market share doesn’t seem too lofty. In reality, it’s pretty challenging. FanDuel and DraftKings continue to sponge up the vast majority of legal sports betting in the United States. The Ohio sports betting market is no exception.
The most recent sports betting handle reports for The Buckeye State are from August 2023. During that month, the Ohio sports betting handle (i.e. total amount spent on wagers) came in at $378.8 million, according to PlayOhio. Of that total, FanDuel ($133.9 million) and DraftKings ($115.8 million) combined to accept $249.7 million. That equates to roughly 66 percent of the Ohio sports betting market share.
On average, ESPN Bet will need to soak up 10 percent of the remaining 34 percent or figure out how to eat into the shares of FanDuel and DraftKings. That’s no small task. Other online sportsbooks have had trouble rivaling FanDuel and DraftKings in Ohio. Even when they gain momentum, it’s negligible.
Take Bet365. They recently started turning in the third largest share of the Ohio sports betting market. In August, that meant accepting $27.8 million in total bets. Still, that only equates to around 7.2 percent of the market—well short of the goal ESPN and Penn Entertainment have set for themselves.
Is ESPN Too Late to the Ohio Sports Betting Party?
Many have posited ESPN waited too long to join sports betting in Ohio—and the United States at large. That might be true. Taking over DraftKings and FanDuel is likely a fool’s errand, at least in the short and medium terms. But ESPN Bet could struggle to contend with Bet365 and the burgeoning Fanatics Sportsbook.
For their sake, ESPN better hope this doesn’t prove to be the case. The company is struggling to generate enough revenue to appease Disney and Disney’s shareholders. Holding live sports rights goes a long way, but it has not effectively slowed the acceleration of cord cutting. So much of ESPN’s business model was tied to cable subscriptions. That industry has entered a free fall ever since 2020. It was already a trend at the time, but the global pandemic increased the rate at which people started ditching traditional cable.
Faced with declining profits and new consumer trends, experts and insiders have started wondering whether Disney would sell ESPN. Others have speculated they might look to divvy up minority ownership stakes to the very sports leagues they cover.
From where we’re standing, ESPN Bet feels like a last-ditch attempt for the company to continue standing on its own. And in their defense, it could work. Though ESPN is not a sports betting powerhouse, they are internationally known. They also have the reach to advertise and push ESPN Bet more effectively than a fledgling sportsbook without massive internet and media properties.
Whether this all pans out will be a matter of course. And in the end, ESPN Bet’s success with Ohio sports betting will likely forecast its overall fate.
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