There was a blockbuster announcement in the sports betting world, when PENN Entertainment and ESPN struck a deal to create ESPN Bet (coming to NJ), ending PENN’s three-year relationship with Barstool Sports, which was started by Dave Portnoy.
The deal is essentially a branding deal for PENN, which will use the ESPN name moving forward, replacing Barstool Sports.
Let’s first take a look at this from the Barstool Sports side of things. On the surface, this appears to be a tremendous deal for Barstool, which essentially gets to keep its earnings from its deal with PENN which was for a reported $551 million back in Feb of 2020, while retaining full control of the company.
It appears the PENN was willing to allow Barstool to take the money to go away and start over with ESPN.
So why the change?
PENN wanted to partner with Barstool to try and capture their young, fraternity-like audience, and capitalize on the sports-betting space. PENN took on the branding element of Barstool, which was powered by Portnoy and his team of content creators.
PENN never got the traction it was hoping for, nor did Barstool, and now Portnoy retains full ownership of the company he created in 2003, essentially for free.
While PENN didn’t just give the company back, they do get 50% of the gross proceeds in the event that Portnoy sells or monetizes Barstool in any way.
Portnoy, in a video told fans, he will not be selling Barstool – ever.
So PENN has decided to double down on the sports betting space with ESPN, forking over a new 10-year deal for $1.5 billion, with another $500 million in stock options to create ESPN Bet, replacing Barstool Sports.
PENN grew increasingly tired of tip-towing around their relationship with Barstool, and what they were saying and how they were saying it.
So now we have ESPN Bet
PENN decided that playing with Barstool was nice, but ESPN is the top brand in sports, and getting the opportunity to align with them was worth handing the company back to Portnoy for essentially, nothing.
ESPN is the place where everyone goes for sports information, and now they have a place where they can place a bet. That is the type of integration PENN is hoping works.
So what happens next?
Well for starters, I would imagine all the previous sports books that were branded as Barstool Sports, will now become ESPN Bet, in all of those locations.
So will ESPN Bet integrate any ESPN content to their betting app, similar to what FanDuel does? ESPN currently has a deal with Caesers Sportsbook to use their lines during their shows like SportsCenter or on the bottom line scroll on the TV, will that deal be replaced by ESPN Bet lines?
That remains to be seen.
So where does PENN fit into the sports betting space?
Now PENN is betting on ESPN Bet to do what FOX Bet and many others could not do, cut into Draft Kings and FanDuel’s grasp on the sports betting market.
So what should you expect from ESPN Bet? offers, bet types and markets
I think there are a ton more questions than answers, but this is a huge branding deal by PENN, and they are hoping that ESPN can do what Barstool could not.
The new branded sportsbook app is expected to launch this fall, and while nothing has been announced, we do know it will be available to iOS and Android users, along with a web browser in these states – AZ, CO, IL, IN, IA, KS, LA, MD, MA, MI, NJ, OH, PA, TN, VA, WV.
One thing that worked for Drak Kings and Fan Duel when they first launched was matching your first bet for a large amount if the first bet loss. It allowed people to sign up, make a large deposit, and make a large bet without fear of losing that big amount.
FanDuel Sportsbook’s $1,000 No-Sweat First Bet was something that was a big hook for first-time users, that ESPN Bet can try and replicate.
You can expect that ESPN Bet will be going all out with offers for its Monday Night Football games, NBA games, Sunday Night Baseball, College Football, and baseball, along with the NHL.
Shows like College Game Day, Monday Night Countdown, and all of its NBA pre-game shows, will likely be littered with ESPN Bet branding. I would expect to see ESPN use Pat McAfee to help push ESPB Bet.
ESPN owns the rights to those leagues’ games, and you can expect that ESPN Bet will create nightly specials for those televised games like special odds boosts, same-game parlay bonuses, and other pre-game and in-game promos.
Will this all be enough to put a dent in the duopoly that is DraftKings Sportsbook and FanDuel Sportsbook?
The initial reports are solid, with 54% of sports bettors saying they plan to use ESPN BET once it launches according to Odds Assist. According the same poll, 46% of sports bettors predict that ESPN BET will become the nation’s most popular sportsbook within the next 3 years.
PENN and ESPN sure hope that’s true.
Fanatics Bet is another upcoming betting brand from the retail company that wants to capitalize on the fast-growing US betting market.