Steve Friess: Why The ESPN-Penn Marriage Is A Match Made In iGaming Heaven

Written By Steve Friess on August 10, 2023 - Last Updated on February 19, 2024
Steve Friess State of Play ESPN, Penn Move Makes Total Sense

State of Play is a column that focuses on the trending stories in the casino and gambling space with sharp and clever insight from senior staff writer Steve Friess. Over his 25-year career, Friess has contributed to publications such as Newsweek, Time, New York Times and more.


There have been some really bad ideas in the gambling industry in recent years.

Fanatics. Betr. Jake Paul. Dave Portnoy. Not imploding the cursed Fontainebleau Las Vegas when they had the chance. A national problem gambling hotline unable to efficiently send callers to local services they need. Asking voters in California to screw over Native American tribes.

Once in a long while, though, a deal is announced that makes all the sense in the world. A decision that stops your scrolling on X or Threads or Mediaite and makes you say, “Oh, wow.” A move that can be — and not in a cliched way — game-changing.

Penn Entertainment’s decision to simultaneously divorce Barstool and consummate a 10-year, $2 billion deal with the American sports world’s most recognizable media brand is just so smart. ESPN gets $1.5 billion in cash over the coming decade plus $500 million in Penn stock, and in exchange, Penn’s mobile sports betting platforms in 16 states will be rechristened as ESPN Bet.

Finally, a branded sportsbook that fits.

Sports Illustrated has been trying in Colorado, Virginia, and Michigan, but the print and online magazine hasn’t been a major draw for sports obsessives a few decades now. And yes, the merch juggernaut Fanatics is native to both the sports and online worlds, except nobody can explain how their coming mobile sportsbook apps will exploit their main asset, a mammoth database of customers and their team loyalties, without running afoul of gambling regulators.

But an ESPN sports betting app? The possibilities for market-grabbing advantages are endless.

An obvious path to growth for ESPN, Penn

ESPN Bet might offer special commentary and game video only available in the app. The network might refuse to air advertising by competing sportsbooks, a move that would put FanDuel and DraftKings at a significant disadvantage in acquiring customers. ESPN Bet could offer hyper-customized parlays or other favorable odds tailored to fans’ favorite teams or sports, which they’d know because it’s one of the first things you tell ESPN when you sign up for its non-gambling app.

If anything can shake up the stubborn hierarchy of popular betting apps, it’s this. I mean, you’re already watching the game on ESPN; why not bet there, too?

That hierarchy is probably the most intriguing, unexpected challenge to emerge in the new era of mobile sportsbooks. After a golden window in the first few months of legal mobile sports betting’s availability in a new state, loyalties seem to congeal. Gamblers spend those early days partaking in welcome offers and noodling around promiscuously from app to app amid a carpet bombing of advertisements.

Then they pick the interfaces or the loyalty programs they like most and settle down. Late comers have little chance of making a big splash, and doing so gets increasingly expensive anyway.

With the rebranding of the Barstool apps as ESPN Bet, though, Penn can take its middle-of-the-pack standings in most of its states and build on that with the (free) marketing engine of its new partner. There’s an obvious path to growth that nobody else will have access to.

A miscalculation by Penn Entertainment

The other profound thing about this blockbuster is what it says about what has happened to sports betting in American society.

It was just a few years ago Penn executives assumed they needed to go with a counterculture partner like Barstool to succeed. They narrowed themselves into a pursuit of a specific demographic — young men — and hitched their wagons to a mercurial, controversial Pied Piper in Dave Portnoy. That reflected an ultimately expensive miscalculation about how mobile sports betting would grow and how profits would emerge.

Meanwhile, it wasn’t but eight years ago that ESPN parent company Disney wimped out on a plan to invest $250 million in DraftKings. Instead, in those days before legal mobile sports betting, Disney agreed to a more traditional marketing relationship in which DraftKings had an exclusive right to advertise fantasy sports on ESPN starting in 2016. The Mouse House, thus, happily accepted some $500 million from DraftKings but stopped short at actually taking an ownership stake in the gambling biz itself.

Disney, the epitome of mainstream America culture, is now a casino company. Barstool, the epitome of niche independence, is not.

Casino world ‘probably not the best place for Barstool Sports’

Perhaps the most interesting remarks about these moves came from Portnoy who, according to a public filing, paid $1 to regain his brainchild along with an agreement not to compete in the gambling business and to give Penn a hefty share of proceeds should he ever sell Barstool.

Some folks online have mocked Portnoy, as if he was jilted by Penn. In truth, Penn and Portnoy knew the relationship wasn’t working out, especially after Penn fired Barstool personality Ben Mintz for uttering a racial slur in a livestream. Mintz offered a sincere apology, but Penn was terrified that regulators would revoke its gambling licenses. This is them doing that Gwyneth Paltrow “conscious uncoupling” thing.

“We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” Portnoy said after the ESPN-Penn deal was announced. The casino world “was probably not the best place for Barstool Sports and the kind of content we make.”

And that’s true. And that’s OK. Barstool goes back to being the tempestuous thorn in the sports world’s side. Penn finally has a logical, effective media partner. Disney is now in the gambling racket.

FanDuel, DraftKings, Caesars and MGM better watch out. The game is finally on.

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Steve Friess

Steve Friess writes the State of Play column for PlayUSA twice a week. He's a veteran gambling-industry reporter who began covering Las Vegas in 1996 and covered the openings of resorts in Asia, Europe, and across the U.S. His bylines have appeared in The New York Times, Playboy, New Republic, Time, BusinessWeek, Newsweek, New York magazine, and many others. He, his husband, their children and three Poms live in Ann Arbor.

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