ESPN and PENN Entertainment’s creation of ESPN Bet has the opportunity to change the sports betting industry in the United States. [Image: Shutterstock.com]
The ESPN bet is taking shape
Yes, ESPN went there. The Worldwide Leader in Sports has partnered with PENN Entertainment to create a new sports betting platform ESPN Bet, making NBA insider Shams Carania’s partnership with FanDuel seem strange and insignificant compared to what could be on the horizon.
An opportunity to carve out an unquestionable niche in the market
While the sports betting industry has proven to be a killer path for many competitors, Disney-owned ESPN has an opportunity to carve out an unquestionable niche in the market by blending its content, programming and talent with a new betting platform.
Partnership results? no one knows. But the repercussions have a chance to extend far and wide.
Find a foothold
ESPN will receive $2 billion ($1.5 billion in cash and $500 million in guarantees) through its partnership with PENN, which now has the opportunity to use ESPN’s name and branding on its sportsbooks.
ESPN has already announced that it plans to integrate its content into the new platform. It comes after ESPN agreed to a five-year, $85 million deal with former FanDuel partner Pat McAfee to host “The Pat McAfee Show” exclusively.
It wouldn’t be the first time that a sports betting platform offered live streaming and multimedia options, but this area of the market had yet to take off. The majority of sports bettors still prefer to take part in their favorite games and shows on TV, computer or other mobile applications.
The need for diversity within the sports betting ecosystem
The importance of finding the right niche cannot be overemphasized. Daily fantasy platforms such as Underdog Fantasy, Prize Picks and the recently launched Petr Picks have capitalized on the need for diversity within the sports betting ecosystem. Fanatics are also looking to combine memorabilia with betting by mixing a variety of assets, including the Topps trading card catalog.
If ESPN succeeds in blending its typical sports coverage and programming with sports betting in a way that no other platforms have yet, it will have significant market control.
The now-shuttered FOX Bet (named after FOX, owner of FS1) had the opportunity, but failed to capitalize on the content corner of the market. FS1 overtook ESPN in TV viewership for the first time in July, which should be a signal to the latter that it needs to continue investing in other areas to reach its audience.
legal ramifications
It is estimated that FanDuel controls 45% of the online sports betting market in the US, while DraftKings ranks second with 30%. But then BetMGM hit 11%, and Caesars fell to 6%, which means ESPN Bet only needs one in 20 customers to be among the “big four” operators.
Despite the national trend of accepting sports betting, California, Texas and Georgia still do not allow the pastime. Florida also recently went to the US Court of Appeals to settle a dispute and still hasn’t launched its market yet.
Those states account for about 30% of the US population. Disney’s massive network of high-profile affiliates, political connections, and financial power would allow it to exert influence over lawmakers in those states, should they choose to go that route.
The fateful decision for Walt Disney to come to Central Florida”
Like any single company, [Disney[ definitely helped shape and mold the state [of Florida]said Aubrey Jewett, a professor of political science at the University of Central Florida. “The economic, political, and social environment in Florida today owes much to Walt Disney’s fateful decision to come to Central Florida.”
Sportsbooks and New York lawmakers are already at odds over the state’s 51% tax on sports betting proceeds. DraftKings has been particularly vocal against it and has threatened to short the odds, lowering the profitability opportunity for clients to help increase their bottom line.
Disney may have the opportunity to publicize its reach in the industry in a big way if these controversies continue. New York is the most successful state for sports betting and would be an attractive target, although PENN operator’s licenses for 16 states do not include a single one for the Big Apple.
