Penn Entertainment and ESPN Executives Share Insights on ESPN Bet Launch

Penn Entertainment and ESPN executives met with Truist Securities analyst Barry Jonas at the Global Gaming Expo in Las Vegas, providing insights into the imminent launch of ESPN Bet in November. 

ESPN Commits Long-term to Sports Betting, Shies Away from iGaming

At the meeting, ESPN’s Vice President of Sports Betting & Fantasy, Mike Morrison, assured stakeholders of ESPN’s long-term commitment to the sports betting sphere, as reported by CDC Gaming. While expressing confidence in the Penn alliance and acknowledging significant equity upside, Morrison clarified that ESPN would not venture into iGaming, focusing solely on sports betting.

Morrison also hinted at the possibility of limited spot media being available for other sports betting competitors, contingent on favorable economics for ESPN. The network, previously affiliated with DraftKings, remained cautious about its foray into the competitive market.

Penn Entertainment’s CEO, Jay Snowden, outlined the company’s strategy, emphasizing the integration of ESPN’s brand equity and customer database. Penn aims to leverage ESPN’s 200 million monthly viewers, combining them with its proprietary tech stack. Snowden cited the success of theScore in Ontario as a template, noting the substantial increase in customer retention and crossover from online sports betting to iGaming.

ESPN Bet Aims to Strike a Balances Between Sports Info and Betting Features

During another meeting with JP Morgan analyst Joseph Greff, Snowden and Morrison underscored their dedication to making ESPN Bet a success. The executives emphasized their focus on meaningful collaboration, indicating strong engagement between ESPN and PENN Interactive, fostering a productive working relationship.

Although the launch date for ESPN Bet remains undisclosed, Greff learned that it was premature for the platform to engage in marketing or promotional activities. Snowden assured analysts that ESPN Bet would strike a balance, catering to users of ESPN apps for sports information who prefer a streamlined experience without overwhelming betting features. Users will have the option to opt-out, ensuring a tailored experience for diverse audiences.

Greff adopted a wait-and-see approach regarding ESPN Bet’s impact, labeling it as a potential major driver for Penn’s stock in the foreseeable future. Despite the competitive market, analysts anticipate ESPN Bet to be a strong contender, offering a competitive yet user-friendly platform. 

Meanwhile, PENN Entertainment reported Q2 revenues of $1.67 billion, a notable increase from the previous year’s $26.1 million.

The earnings call highlighted two significant developments: a $1.5 billion deal with ESPN to rebrand Barstool Sportsbook as ESPN BET and a divestiture of Barstool brand to founder Dave Portnoy. Despite these changes, PENN’s Interactive division saw a remarkable 66.2% YoY revenue growth, reaching $257.5 million, attributed to a revamped sportsbook app. This suggests that the ESPN Bet agreement could lead to substantial growth opportunities for Penn Entertainment.