Conflict Of Interest? Insiders Will Move Odds On ESPN Bet
PENN Entertainment dropped a bombshell on the sports betting industry when financial markets closed Tuesday, forking over $2 billion in cash and stock to ESPN. In turn, PENN announced the launch of ESPN Bet — the soon-to-be exclusive online sportsbook of the “Worldwide Leader in Sports” — while axing its agreement with Barstool in the process. Now, ESPN and PENN must navigate a climate where sports media insiders already get accused of conflicts of interest with partner sportsbooks, especially after the Shams Charania backlash for his market-moving tweets during the NBA Draft.
With that in mind, how will this deal impact the image of sports gambling on the country’s biggest sports media brand?
ESPN BEt: The Skinny
In case you’re new to the sports betting landscape, ESPN has long been searching for a way to break through into the sports betting market without operating one itself. Via this blockbuster deal with PENN Entertainment, the network isn’t required to facilitate individual wagers. PENN even granted ESPN approximately $500 million of warrants to purchase 31.8 million PENN shares. ESPN is absolutely invested in the success of PENN now, especially once the platform officially launches midseason.
Meanwhile, PENN will take its sports betting product, formerly known as Barstool Sportsbook, and stamp ESPN’s illustrious moniker on it.
In an era after NBA referee Tim Donaghy was caught in a point-shaving scandal, millions of sports fans already believe integrity issues in the outcome of games are possible. In 2008, the ex-NBA official confessed to betting on games, pleading guilty to conspiracy to engage in wire fraud. He also admitted to communicating valuable wagering information to others for his part in the scandal.
Considering the current multi-billion-dollar deals between ESPN and both professional and collegiate leagues, these conflict-of-interest concerns shouldn’t come as a surprise. However, there’s more to it than just a signature.
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Perception of Integrity Just as important as Reality
For experienced sports bettors, the correlation between sportsbooks and reporters engaging in any sort of unjust activity is laughable. But for casual ones, we have to acknowledge the notion certainly exists.
Take the 2023 NBA Draft as a prime example. Shams Charania, who works for both The Athletic and FanDuel Sportsbook, reported days before the main event that Scoot Henderson to the Charlotte Hornets was “gaining serious momentum.” Just like other operators, FanDuel displayed a betting market for the second pick, and Charania’s inkling essentially turned Henderson into the odds-on favorite.
Nevertheless, the Hornets selected Brandon Miller, who did eventually close as a -1000 favorite. A similar incident took place with Adrian Wojnarowski, an ESPN NBA insider and Charania’s counterpart, in regards to the 2022 NBA Draft and Paolo Banchero odds.
Not all reports come to fruition. But there was still a sentiment amongst a handful of content creators and novice gamblers that FanDuel reaped the benefits. After all, an abundance of bettors lost money solely because of Charania’s inside scoop. FanDuel rightfully shredded the premise of having any knowledge with respect to when Shams would share his findings.
The claims of a loyalty conflict, as Shams gets paid by both a sportsbook and The Athletic, made it all the way to the New York Times sports department. The NYT owns The Athletic, and its own journalists were voicing these concerns over standards to their management upon the closing of the NYT’s sports desk.
Let’s not fool ourselves. Bettors have the choice to place a wager based on a reporter’s findings. That said, there’s a 99.9% implied probability that Adam Schefter — or any another ESPN personality — will eventually reveal news that culminates in odds on ESPN Bet drastically shifting.
If a Charania-like incident occurs, an even bigger public outcry will follow suit.
Reponse To potential scrutiny
According to Front Office Sports, ESPN may ban its employees from betting on the app entirely. Additionally, “high-level executives” will determine how the network will cover live drafts in the future. ESPN Bet is anticipated to launch in November. Although this timeframe is past the start of the NFL regular season, it’s still within reach of the College Football Playoff, Super Bowl odds, and March Madness.
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