Will ESPN Bet Be First Media Brand To Succeed In Sports Betting?
PENN Entertainment and ESPN have announced a $2 billion branded sportsbook agreement which will see the launch of ESPN BET. It also means the end of Barstool Sportsbook. Historically, sports media brands have not managed to see major success in the industry. The recent closure of FOX Bet is the latest example of this. Can ESPN become the first major sports brand to capture meaningful market share, or at least become one of the best sports betting sites?
ESPN Bet Replaces Barstool Sportsbook
This agreement will rebrand the current Barstool Sportsbook into ESPN BET, as PENN has divested from Barstool Sports. During their three-year relationship, Barstool has run into several controversies, while working in the regulated space under PENN. These include issues with CEO Dave Portnoy and content creators gaining backlash for their content from regulators.
Additionally, Barstool Sportsbook never managed to be a major player in the sports betting industry. Despite being active in 16 markets, Barstool was not in the top three in any of them. Like Sports Illustrated’s SI Sportsbook, the aforementioned FOX Bet and Yahoo! Sportsbook, Barstool Sportsbook was another sports media brands to not dominate in the space.
It seems all parties involved believe that ESPN’s brand is more suited for the regulated space. PENN is betting ESPN BET is poised to be more successful than Barstool Sportsbook.
“Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” said Jimmy Pitaro, Chairman, ESPN. “The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET.”
An unmatched user experience is a big promise in a market with two dominant forces – FanDuel and DraftKings.
How Media Companies Have Faired In The Sports Betting Market
There has been little success for sports media brands in the sports betting industry. Flutter Entertainment and FOX Corp. announced the closure of FOX Bet operations. FOX Bet failed to gain significant market share in any of its active markets.
SI Sportsbook, a sports betting operator run by 888 Holdings and branded by Sports Illustrated, may be headed to the same fate. Since its launch, SI Sportsbook has failed to be profitable. Its parent company 888 Holdings strategically shifted its focus in 2022 to markets that also allow for iGaming and casino services.
SI Sportsbook has no plans to try and expand into other markets. The operator was $1.9 billion in debt and saw consistent quarterly drops before making this decision.
Struggles in the sports betting industry don’t just affect media brands either. Australia-based PointsBet Sportsbook sold its U.S. operation to Fanatics due to lack of profitability in the space. Golden Nugget, a casino brand, sold its sports betting operation off to DraftKings.
Investors show early signs of belief in ESPN BET
It appears the immediate reaction from the financial market is positive. PENN Entertainment’s stock rose 24%, following the announcement of the ESPN deal.
Being able to enter 16 markets out the gate and being live in time for the NFL season also helps. ESPN is also the largest sports media brand. With more brand recognition than the likes of Sports Illustrated and FOX, ESPN BET could be accepted by a wider audience.
But if ESPN BET fails to capture meaningful market share in the sports betting industry, then it’s likely no media brand can.