After more than two decades with ESPN, anchor Scott Van Pelt has become a familiar face to viewers, known for his commentary on the 18th hole at the US Masters golf tournament and breaking sports news on SportsCenter. In a new advertisement promoting the launch of ESPN Bet, the network’s betting venture with casino group Penn Entertainment, Van Pelt is shown excitedly reacting to a notification on his phone declaring him a “winner!”
The $150 million per year 10-year licensing deal between Penn and ESPN shows their confidence in capturing a share of the rapidly growing US online sports betting market. The hope is that ESPN’s annual audience of 200 million will help them gain ground on the current leaders, DraftKings and FanDuel.
For ESPN, the partnership with Penn provides expertise and technology to power the new app, which Penn acquired in its $2 billion takeover of Canadian gaming app, theScore. Penn also operates over 40 bricks-and-mortar casinos.
Despite entering the market later than others, ESPN Bet is launching in 17 states and plans to spend an additional $150 million per year on marketing. However, the betting market has rapidly consolidated since the US Supreme Court overturned a law banning sports betting in 2018, making it difficult for new entrants to gain market share. Still, companies like Fanatics and its sister app PointsBet, are hoping to attract customers by offering incentives like free sports jerseys.
Matt King, CEO of Fanatics betting app, acknowledges that they are a second mover but sees this as an opportunity to build their product more methodically. However, Penn does not have the luxury of time to make a success of ESPN Bet. Three years into the partnership, ESPN has the option to end the deal if the app fails to gain significant market share. However, Penn and ESPN are confident that research shows a high level of interest in ESPN Bet among sports bettors.
Nevertheless, entering the gambling market is not without risks for ESPN and its parent company Disney. The contentious nature of gambling could lead to pushback from some viewers and critics.
However, with the US sports betting market expected to grow by 60% to nearly $18 billion in annual gross gaming revenues by 2027, the potential rewards make the risk worthwhile. Analysts believe that while DraftKings and FanDuel have established themselves as leaders, there is still room for new innovations and challengers to emerge. As the market continues to evolve, the long-term future of the US sports betting industry is uncertain.