The biggest name in American sports broadcasting is banking on the lucrative gambling industry, launching an online betting platform that will initially be available in 17 states.
ESPN partnered with Penn Entertainment, a sports content and casino gaming experience provider that previously launched the Barstool Sports sportsbook, to create the betting service, called ESPN Bet.
Pen said in August it will pay ESPN $1.5 billion for rights to the sports media giant’s name and to operate the betting platform under a 10-year deal. ESPN will also receive about $500 million to buy shares in Penn and, according to the deal, has agreed to promote ESPN Bet across its online and broadcast channels.
The gaming platform went live for sign-ups on Thursday, but still needs approval from gaming commissions in each state.
ESPN is plunging into the sports betting business as parent company Disney looks to boost profits across the entertainment giant. Although gambling has exploded as a growing number of states legalize it, the broadcaster will face entrenched competitors in the form of DraftKings and FanDuel, which control about 80% of the online sports betting market,
“ESPN and Penn believe they can infiltrate this market,” Andrew Brandt, a sports business professor at Villanova University, told CBS MoneyWatch. “They want to make it like one-stop shopping where you go to check the score and there’s your betting statements right there. They think they can offer a better product.”
The states that will first offer ESPN Bet are:
- New Jersey
- West Virginia
Creating ESPN Bet is a strategic move for both Penn and ESPN. The broadcaster wants to increase revenue by serving sports gambling fanatics, while Penn was looking for a new sports betting partner after ending its partnership with Barstool, Brandt said.
For both companies, what’s at stake is grabbing a piece of the fast-growing sports gambling industry. Revenue at DraftKings, FanDuel, Caesars Sportsbook and BetMGMas more fans with time on their hands placed bets. These companies gained even more steam in recent years as additional states legalized online sports betting.
$100 billion in stakes
Online sports betting is now legal in 27 states, and Americans are expected to bet more than $100 billion on the hobby this year, according to to the American Gaming Association.
“It’s a fertile market, even if it’s saturated,” Brandt said. “With sports betting so legalized and so mainstream, it’s becoming a way to really infiltrate the younger demographic.”
Despite its pedigree covering sports, ESPN is a relatively late entrant to betting. Most existing sports gambling companies set up shop within months of onein 2018 that struck down a federal law that banned gambling on football, basketball, baseball and other sports. Sports goods company Fanatics also launched an online sportsbook in August.
The growth of sports betting. Others, like NCAA President Charlie Baker, are concerned about how sports betting will affect college athletics.
Baker recently told CBS News that there can be intense pressure on student-athletes to perform well in college sports because a family member or friend has bet on the competition.
“The fact that it’s now on your phone [and] you can do it anytime, it’s a real challenge — not just for us, but for student-athletes,” Baker told CBS News earlier this month.