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ESPN Bet took over as the branding face of Penn Interactive’s online sportsbook on Tuesday. Bettors in 17 states in which Penn has a license to accept sports wagers now have a new option and the launch of an ESPN-branded online sportsbook has serious implications for the online gambling industry in the United States.
In terms of endemic media brands aligned with sports content, there is no bigger name in the US than ESPN. Thus, for an online sportsbook, tying betting markets to content will never be easier.
Situations will unfold that could maximize the potential of ESPN as a promotion mill for ESPN Bet. At the same time, endemic media and relatively inexpensive promotion avenues are no guarantee of future success.
ESPN Bet takes over branding in 17 states
During Penn Entertainment’s most recent earnings call, it told investors that Nov. 14 was the launch day due to that issue. If ESPN content simply becomes a long-form commercial for ESPN Bet, regulators will take notice and could act in a way detrimental to Penn’s licensure.
The return on investment for streaming products like ESPN and Hulu is another reason to doubt that ESPN will simply push ESPN Bet on a never-ending loop.
The math may not math
Even on streaming platforms, advertisement space is a finite commodity. Devoting such space to a partner like ESPN Bet could represent a loss of revenue if Penn isn’t paying the standard price to ESPN or Hulu for that airtime.
Given that Disney via ESPN would only be getting a portion of ESPN Bet revenue, that could add up to a loss compared to what Disney would pull from simply selling that airtime to a different brand. Furthermore, that revenue could be much more unpredictable.
If Disney is getting a straight percentage of ESPN Bet’s revenue, the volatile nature of sports wagering might be unattractive. Even if ESPN Bet is successful in gaining market share, revenue can still fluctuate wildly from one month to the next.
In comparison, rates for advertising on Hulu and ESPN are more predictable. Disney also has greater control over that revenue, being able to ask its price to an extent. At its simplest level, ESPN Bet is a way for ESPN to make some more revenue on its existing products.
Because of the uncertainty of online sports betting and how popular ESPN Bet will become, it’s unlikely Disney will invest heavily in promotion. Much of that could be left to Penn to take on. Even amid changes to Disney’s streaming products, don’t expect to see one ESPN Bet promo after another.
The House of Mouse has other things cooking.
