ESPN BET won’t be ready for the start of football season. Here’s when it will launch.
The ESPN BET partnership is preparing for a launch before Thanksgiving Day.
ESPN’s partnership announcement with PENN Entertainment to create ESPN BET now has a targeted launch date for the middle of football season.
In PENN’s second-quarter earnings report call on Wednesday, CEO Jay Snowden said the plan is to have the operation go live in November, preferably before Thanksgiving, avoiding the craziness of the start of football season and allowing the company to fully integrate its product on ESPN’s digital platforms.
”We want to make sure we have the time to not just to do the reskinning of the apps at ESPN BET in a way that is branded appropriately,” Snowden said on the call. “It’s also to make sure we have the capacity to handle significantly more volume. We’re not doing this deal to be 4% or 5% market-share players. That’s not going to be acceptable for us; that’s not going to be acceptable for ESPN.”
The former Penn National Gaming, PENN Entertainment is based in Wyomissing, Berks County. Since starting from the ground up with Barstool Sports in 2020, PENN’s bettor database has significantly grown since its inception. The partnership with Barstool is over, but Snowden noted that the nucleus of the betting database is a younger demographic, something the two companies sought after entering their initial agreement.
» READ MORE: ESPN partners with PENN Entertainment to form ESPN BET, which will launch this fall
”The average age in our digital database is around 29 years old; I think that’s great,” Snowden said. “We have 1.5 million people in that database that weren’t there before we launched Barstool Sportsbook.”
During Walt Disney Co.’s third-quarter earnings call Wednesday, CEO Bob Iger agreed with PENN’s sentiment in acquiring a “younger consumer audience,” which played a factor in the partnership coming together.
Iger added that Disney turned down several lucrative offers because of PENN’s aggressive approach to entering a partnership with ESPN.
“Why PENN? Because PENN stepped up in a very aggressive way and made an offer to us that was better than any of the competitive offers by far,” Iger said on the Disney call. “And we liked the fact that PENN is going to use this as a growth engine for their business. And that we actually believe and trust in their ability to, in this partnership, grow their business nicely, while we grow ours.”
In lieu of ESPN’s new betting venture with PENN, Disney announced it sold its 5% stake in DraftKings last quarter, allowing it to take a $90 million gain. ESPN originally entered a marketing partnership with DraftKings and Caesars Entertainment in 2020.
Even with PENN’s exclusive-rights agreement with ESPN, which breaks down to roughly $150 million per year over 10 years, the global sports brand will still have the opportunity to take advertising money from competitive operators. However, Snowden said on the call, “I’m not worried about that. I think it’s going to be very clear if you tune into ESPN programming, they’re fully behind ESPN BET.”
PENN’s CEO added that it is in the process of taking down Barstool branding inside its physical sportsbooks and casinos, leaving open the potential for ESPN BET-branded brick-and-mortar sportsbooks in the future. With theScore Bet acting as a model in its Canadian operation for what it hopes to accomplish with ESPN BET, PENN is hoping to expand its reach beyond the licensed 16 states in which it currently operates.
”Going into ESPN BET sets you up get access pretty much anywhere,” Snowden said. “Now some states, there’s limited licenses ... but if there’s a will there’s a way. And there’s some creative ways to get into states that we’re not already in.”
» READ MORE: Why the Atlanta Falcons are worthy of your future bet consideration ahead of the 2023 NFL season.
During the call, PENN said it expects to have 20% of the online sports betting market by 2027. In addition to having the $150 million investment into ESPN per year, PENN is going to spend significant money on off-channel marketing, something it avoided during the partnership with Barstool.
There’s also a provision in the agreement that allows PENN to opt out of the partnership after three years, although the specifics were not detailed during the earnings call. PENN closed the second quarter at $0.48 per share, 14% over expectation.