ESPN enters the betting game on a deal with Penn Entertainment
The GIST: ESPN’s gotta do its own thing. On Tuesday, the sports media giant announced a deal with Penn Entertainment to officially enter the betting game. As more details continue to trickle in, the partnership has widespread implications for women’s sports and the betting sphere as a whole. Cue Troy Bolton.
The partnership: This fall, Penn will rebrand its current sportsbook to ESPN Bet in the 16 U.S. states where the brand is already licensed for sports betting. ESPN will get at least $1.5B over 10 years from Penn, including $150M in cash per year. However, it does have to terminate its lucrative partnerships with DraftKings and Caesars Entertainment.
- The goal of the deal is to streamline sports betting for ESPN’s huge audience of sports fans. Notably, the deal returned Barstool Sports to Dave Portnoy after Penn paid $388M for the final 64% of it earlier this year.
Overall sports betting trends: The betting industry is certainly on the rise in the U.S. — over $220B in bets were placed since the legalization of sports betting five years ago, with almost $90B wagered between May 2022 and April 2023, a 22% increase YoY. Sportradar, which holds exclusive agreements with MLB, the NBA and NHL, just reported a 22% revenue increase in Q2, further evidence that sports betting is the place to be.
Women’s sports betting and gamification: Women’s sports also reflect the industry’s rise. A recent study revealed a significant surge in betting on women’s sports globally, with soccer showing 20% annual growth since 2020. At DraftKings, women’s sports bets were up 61% YoY in 2022, while FanDuel saw a 270% bet count increase for the WNBA in the same year.
- Additionally, women fans are starting to bet more often. According to the Fantasy Sports & Gaming Association (FSGA), 34% of sports bettors are women and so are 33% of fantasy sports players.
- ESPN could take women’s sports betting to the next level — it already set a precedent in fantasy sports when it launched a WNBA fantasy league as the first full-scale, season-long fantasy game for a major women’s sport.
- The company will no doubt utilize its top-tier apps (ESPN and ESPN Fantasy) to achieve the agreement’s goal of streamlining sports betting. And its trailblazing gamification in women’s sports suggests that women’s leagues will be included in this new frontier for ESPN.
Lingering questions: ESPN is the self-proclaimed “worldwide leader in sports,” so how will this affect its (now) competitors in the sports betting space? The industry has already seen multiple companies fold after being unable to compete with sports betting giants like DraftKings, FanDuel, and BetMGM.
- Will the resources of ESPN allow them to be a valiant challenger or just the next victim? And how will it deal with potential conflicts of interest? Only time will tell, but we’re betting things will get interesting.