Every wise bettor knows that the key to getting the best price on a wager is shopping around until it’s found. With that in mind, it’s always exciting when a new operator joins the fray.
The more the merrier, right?
When Penn Entertainment (Penn Entertainment 19,16 +5,04%) and ESPN announced their partnership, which would birth ESPN BET, bettors and sports fans alike were eager to try their luck with the new kid on the block—especially because ESPN is synonymous with sports.
But “Big E” is not just synonymous with sports. It is sports. ESPN is the ultimate authority, from programming and breaking news to live events and lively personalities.
So can ESPN BET follow suit and become to betting what ESPN already is to sports?
Happy 6-Month Birthday, ESPN BET
It’s a trend that’s very familiar. Perhaps a favorite social media influencer fawns over their 6-month-old. Or maybe you’ve never seen it, but trust me. It’s a thing. Celebrating the half-birthday is definitely a thing.
This means it’s time to wish a happy half to ESPN BET because this week marks six months since its launch. However, lighting a candle might be a bit premature. That’s because everything has not been coming up cash for the new book.
In partnership with Penn Entertainment, ESPN launched ESPN BET in mid-November 2023. Initially, it appeared that the collaboration between the Worldwide Leader in Sports and betting would be a worthwhile gamble.
In Month 1, the newcomer claimed 8.1% of the market share — an impressive feat considering the landscape is saturated with the FanDuels and DraftKings of the world.
But what happened next was not on BET’s bingo card.
Analysis from Bank of America showed that in January, ESPN BET’s market share plummeted to 2.5% before jumping back to 3.7% in March.
For reference, FanDuel’s market share in January was 49%. DraftKings’ market share in Quarter 1 was 34%.
Additionally, reports show that ESPN BET is offering considerably more promotions to users than its competitors. Those customer “gimmes” adversely affect the book’s revenue.
So why is the most recognizable brand in sports climbing an uphill battle in its latest venture?
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Crowded Playing Field
When it comes to sportsbooks, it’s all about FanDuel and DraftKings.
In Q1, FanDuel reported $1.4 billion in revenue, up from $1 billion one year ago. Flutter Entertainment (Flutter Entertainment 25,34 +0,04%), FanDuel’s parent company, projects its total revenue across all its properties to be upward of $6.2 billion in 2024.
DraftKings’ Q1 revenue report showed that the Boston-based book wasn’t too far behind leader FanDuel. The Kings revealed that its Q1 revenue was $1.18 billion.
In addition to the most recognizable beasts in the industry, there are a host of other operators.
These mid-to-lower-tier sportsbooks, though, aren’t raking in billions like the “Big 2.” Let’s take Caesars Sportsbook. Its earnings paled in comparison to those of the big dogs, with a reported $282 million in first-quarter revenue.
ESPN BET’s Q1 revenue? $208 million.
In addition to those listed above, at least a handful of other books claim their own corners of the industry: BetRivers, Bet365, Fanatics, and Hard Rock, to name a few.
Essentially, numerous players are trying to score big in this space, which makes navigating this crowded field even more challenging for a newbie like ESPN BET.
Keeping up With the Competitors
A rookie sportsbook must have a path forward to make a solid name for itself. Maybe it’s about emulating what others in the space do well while creating a new identity.
One thing that competitor FanDuel does particularly well is bring candor to the betting space with its programming. For example, FDTV has in its lineup Up & Adams, an off-cuff betting show anchored by host Kay Adams. In it, Adams delivers timely sports news with betting analysis while adding a light-hearted, self-deprecating humor.
Speaking of self-deprecating, no one does that better than DraftKings.
The network of programs under the DK umbrella includes shows like All the Smoke and The Dan LeBatard Show, the latter of which was ironically an ESPN sports-talk staple for several years.
Hosts and guests rarely take themselves seriously on these shows and others like them at DraftKings. This approach makes the overall viewing experience, to put it simply, a lot of fun to watch.
Now, in fairness, the majority of DraftKings’ most-viewed podcasts aren’t even gambling-centric. However, sports fans naturally associate DraftKings with betting. Therefore, it’s reasonable to assume that, as DK gains viewers, those viewers will naturally become interested in and (sometimes) become sportsbook users.
ESPN — unlike DraftKings or FanDuel — absolutely dominates the market in terms of straight sports and sports news content. The Worldwide Leader boasts that it has an “unrivaled reach and extensive user base,” and therein lies the company’s greatest strength.
ESPN could build on that Goliath advantage and then incorporate into its matrix more fun, spirited, sports-betting content that informs while entertaining. Perhaps once it finds its version of, say, a Kay Adams, the network will have more success at converting diehard ESPN junkies into passionate ESPN BET customers.
Bright Days Ahead
In ESPN’s Future of Sports Media and Betting pitch deck that the company shared before the ESPN BET launch, its leaders explicitly spelled out lofty goals on how they planned to be successful in the sports betting industry.
And when it comes to sports, everyone knows that ESPN has never met a lofty goal it couldn’t tackle.
Blending “cutting-edge proprietary tech” with “marquee sports programming” is just a glimpse into the company’s strategy, and I believe this strategy will eventually be winning one.
Remember that the NFL and college football seasons are three months away—the leaders’ bread and butter.
By the time the players get back on the gridiron in August, fans will have had almost a year to familiarize themselves with the book, app, promotions, interface, and associated talent. ESPN BET will also have had more time to strategize best practices to reclaim that early momentum.
Ultimately, we should never judge a sportsbook by its cover. While it’s unlikely that ESPN BET will surpass FanDuel or DraftKings, in time, I fully expect ESPN BET to rise to the occasion and carve out its own competitive corner in the industry.
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