ESPN Bet Launches, Looks to Shake Up Online Sports Betting Market
After months of planning, ESPN BET has officially launched today.
The much-anticipated sports betting operator launched across 17 states, several months after PENN Entertainment agreed to a sports betting branding partnership with ESPN.
PENN Entertainment and ESPN agreed to a 10-year, $1.5 billion partnership over the summer to rebrand Barstool Sportsbook as ESPN BET. ESPN had been rumored to be looking for a sports betting partner over the last several years.
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ESPN BET Hopes to Be a Market Giant
Customers will be prompted to download the new ESPN BET app today. No re-registration will be required and all customer information will still be saved in the app.
PENN secured the exclusive rights in August to the ESPN BET trademark for online sports betting in the U.S. for an initial 10-year term which may be extended for an additional 10 years upon mutual agreement. PENN Entertainment agreed to pay $1.5 billion to ESPN over the initial 10-year term and grant ESPN approximately $500 million of warrants to purchase 31.8 million PENN common shares.
PENN's Barstool Sportsbook has been completely rebranded to ESPN BET, while theScore Bet will continue to operate in Canada. The rebrand included the mobile app, website, and mobile website. PENN Entertainment will oversee the daily operations of ESPN BET sportsbook.
The new sports betting app will offer featured bets, quick bets (micro-markets), player props, same game parlays and more.
ESPN BET will go live in the following states today:
- Arizona
- Colorado
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maryland
- Massachusetts
- Michigan
- New Jersey
- Ohio
- Pennsylvania
- Tennessee
- Virginia
- West Virginia
PENN Entertainment is banking on its ESPN partnership to capture more of the national market share and has included incentives in its partnership with the sports media giant for online sports betting market percentages it hits. Upon ESPN meeting certain U.S. online sports betting market share, ESPN can receive bonus warrants to purchase up to an additional 6.4 million in PENN shares.
Described as a "significant value creation," PENN estimates it could see an annual adjusted EBITDA of $1 billion by 2027 if it captures 20% of the online sports betting market share in North America through its partnership with ESPN.
Seamless Integration from ESPN Content to Sportsbook
ESPN BET will provide "seamless integration" for ESPN BET users from ESPN content to its sportsbook, PENN Entertainment CEO and President Jay Snowden said during a launch preview last week.
Similarly to how PENN Entertainment connects users from theScore media app to theScore Bet sportsbook app, ESPN BET users will be able to put together bet slips while reading content in their ESPN media app, Snowden said. Nearly 73% of bets made in theScore Bet sportsbook app originated from theScore media app.
The opportunities for crossover content is "tremendous," Snowden said. For instance, in the future ESPN Fantasy users could receive custom-tailored player prop bet opportunities consisting of players they have on their fantasy rosters.
Something ESPN 'Has' to Do
When it became clear that ESPN was looking to get into the sports betting market, Snowden said ESPN made it known that they wanted to align themselves with a company that had extensive experience operating sportsbooks, had access throughout the country, and had best in class products and technology.
Snowden met with ESPN Chairman Jimmy Pitaro earlier this year to discuss a potential deal. Pitaro said ESPN had made it a priority to keep sports bettors within its ESPN ecosystem instead of having to go to an outside sportsbook to place a bet.
"When (customers) are ready to place a bet, they have to leave ESPN's ecosystem and go somewhere else to place a bet. It was clear to Jimmy (Pitaro, ESPN Chairman) that this isn't something that ESPN wants to do, it's something that ESPN has to do because sports fans are demanding it," Snowden said.
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