The biggest name in US sports broadcasting is putting its money into the lucrative gambling industry, launching an online betting platform that will initially be available in 17 states.
ESPN has partnered with Penn Entertainment, a provider of sports content and casino games that previously launched the sports book Barstool Sports, to create the betting service called ESPN Bet. The platform began registering on Thursday, but still needs approval from gaming commissions in each state.
ESPN is getting into the sports betting business as parent company Disney looks to boost profits at the entertainment giant. Still, as gambling explodes as more states legalize it, the broadcaster will face established competitors in the form of DraftKings and FanDuel, which control roughly 80% of the online sports betting market.
“ESPN and Penn believe they can penetrate that market,” Andrew Brandt, a sports business professor at Villanova University, told CBS MoneyWatch. “They want to make it a one-stop shop where you go to check the score and right there is your betting opinion. They think they can offer a better product.”
The countries that will be the first to offer ESPN Bet are:
- Arizona
- Colorado
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maryland
- Massachusetts
- Michigan
- New Jersey
- Ohio
- Pennsylvania
- Tennessee
- Virginia
- West Virginia
The creation of ESPN Bet is a strategic move for both Penn and ESPN. The broadcaster wants to increase revenue by catering to sports gambling fanatics, while Penn was looking for a new sports betting partner after ending its partnership with Barstool, Brandt said.
For both companies, what’s at stake is grabbing a piece of the fast-growing sports gambling industry. Earn at DraftKings, FanDuel, Caesars Sportsbook and BetMGM spiked during the pandemic as more fans with time on their hands placed bets. These companies have gained even more traction in recent years as additional states have legalized online sports gambling.
$100 billion in bets
Online sports betting is now legal in 27 states, and Americans are expected to wager more than $100 billion on the hobby this year, according to the American Gaming Association.
“It’s a fertile market, even though it’s saturated,” Brandt said. “With sports betting so legalized and mainstream, it becomes a way to really tap into that younger demographic.”
Despite its pedigree covering sports, ESPN is a relatively late entrant into betting. Most existing sports betting companies set up shop within months of a Decision of the Supreme Court in 2018, which overturned a federal law banning gambling on football, basketball, baseball and other sports. Sporting goods company Fanatics also launched an online sportsbook in August.
The growth of sports betting worries some addiction experts. Others, like NCAA President Charlie Baker, worry about how sports gambling will affect college athletics.
Baker recently told CBS News that there can be a lot of pressure on student-athletes to perform well in college sports because a family member or friend has placed a bet on the competition.
“The fact that it’s already on your phone [and] you can do it anytime, it’s a real challenge — not just for us, but for student-athletes,” Baker told CBS News earlier this month.
