ESPN Bet takes shape
Yep, ESPN went there. The Worldwide Leader in Sports forged a partnership with PENN Entertainment to create new sports betting platform ESPN Bet, making NBA insider Shams Carania’s previously criticized partnership with FanDuel look quaint and insignificant compared to what could be on the horizon.
opportunity to forge an unimpeachable spot in the market
Although the sports betting industry has proven to be a fatal pathway for many competitors, Disney-owned ESPN has an opportunity to forge an unimpeachable spot in the market by blending its content, programming, and talent with a new wagering platform.
The results of the partnership? Nobody knows. But the ramifications have the chance to run far and wide.
Finding a foothold
ESPN will receive $2bn ($1.5bn cash and $500m in warrants) through its partnership with PENN, which now has the opportunity to use the ESPN name and branding on its sportsbooks.
ESPN already announced that it plans to integrate its content into the new platform. This comes after it agreed to a five-year, $85m deal with ex-FanDuel partner Pat McAfee to exclusively host “The Pat McAfee Show.”
This will not be the first time a sports betting platform offers live-streaming and multimedia options, but that area of the market is yet to take off. A majority of sports bettors still prefer to take in their favorite games and shows on the television, computer, or other mobile apps.
need for diversity within the sports betting ecosystem
The importance of finding the right niche cannot be overstated. Daily fantasy platforms such as Underdog Fantasy, Prize Picks, and the recently launched Betr Picks have capitalized on the need for diversity within the sports betting ecosystem. Fanatics is also looking to combine memorabilia with betting by blending a variety of assets, including the Topps trading card catalog.
If ESPN succeeds in blending its typical sports coverage and programming with sports betting in a way no other platforms have yet done, it will carve a major hold on the market.
The now-shuttered FOX Bet (named after FOX, owner of FS1) had the opportunity but failed to capitalize on the content corner of the market. FS1 overtook ESPN in television viewership for the first time in July, which should be a sign to the latter that it needs to continue investing in other areas to reach its audience.
Legal spillover
Estimates suggest that FanDuel controls 45% of the US online sports betting market, with DraftKings second at 30%. But after that, BetMGM is at 11%, and Caesars has fallen to 6%, which means that ESPN Bet only needs about one in 20 customers to be on par with the “Big Four” operators.
Despite the national trend of acceptance of sports betting, California, Texas, and Georgia still do not authorize the pastime. Florida also recently went to the U.S. Court of Appeals to settle a dispute and is still yet to launch its market.
Those four states represent about 30% of the US population. Disney’s enormous network of high-profile affiliates, political connections, and financial power would allow it to exert influence on lawmakers in those states, should they choose to go down that route.
the fateful decision of Walt Disney to come to Central Florida”
“As much as any single company, [Disney] definitely helped shape and mold the state [of Florida],” said Aubrey Jewett, a political science professor at the University of Central Florida. “The economic, political and social environment that is Florida today owes a lot to the fateful decision of Walt Disney to come to Central Florida.”
Sportsbooks are already at odds with New York lawmakers over the state’s 51% tax on sports betting revenue. DraftKings has been particularly outspoken against it and has threatened to shorten odds, leading to a lower chance of profitability for customers to help grow their bottom line.
Disney may have the opportunity to announce its arrival in the industry with a bang if those disputes continue. New York is the most successful sports betting state and would be an attractive target, though PENN’s operator’s licenses in 16 states do not include one for the Big Apple.