Penn Entertainment during its second-quarter earnings presentation today revealed a strategy to strengthen its ESPN Bet sportsbook brand.
The ESPN Bet sportsbook at Hollywood Greektown in Detroit was the first retail ESPN sportsbook to open in the U.S. Penn Entertainment is bringing the ESPN Bet brand to several other casinos this fall. (Image: Penn Entertainment)
Penn continues to struggle to gain meaningful market share in the U.S. sports betting landscape. After a strong debut last November in which ESPN Bet attracted many signups and was thought to have poached some players from market leaders DraftKings and FanDuel, ESPN Bet today is estimated to command just 4% of the legal sports betting market.
Penn’s bet on integrating the ESPN brand into its sports betting business was substantial. After folding on its Barstool sports betting enterprise that the Pennsylvania-based regional gaming operator paid $527 million to acquire only to sell it back to its founder Dave Portnoy for just a dollar, Penn entered into a partnership with ESPN.
The 10-year deal to leverage the ESPN brand costs Penn $1.5 billion. Billed as the “Official Sportsbook of ESPN,” ESPN Bet is live in 18 states, with the 19th on the way via New York.
Heightened Brand Awareness
During Penn Entertainment’s Q2 earnings report, the Hollywood casino operator revealed dreadful results for ESPN Bet.
The firm’s interactive division, which includes ESPN Bet, saw revenue decline nearly 10% to $232.6 million. Adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) plummeted from a loss of $12.8 million in Q2 2023 to $102.8 million.
In a desperate effort to turn around ESPN Bet’s performance, Penn officials announced a plan to increase customer acquisitions and make the platform more attractive than its competitors.
Penn’s earnings presentation revealed that ESPN will air “ESPN Bet Live” on its primary cable channel next Monday and Tuesday at 5 pm ET. “ESPN Bet Live” is a daily program focused on the day’s biggest storylines through the lens of sports betting.
The program debuted last November and primarily runs on ESPN2 and streams on the Watch ESPN app.
The test run airing “ESPN Bet Live” on ESPN during a prime evening hour is expected to bring more awareness to the sportsbook brand. After Tuesday, “ESPN Bet Live” is scheduled to return to its daily 5 pm ET timeslot on ESPN2.
Penn’s release added that ESPN Bet will be integrated into the ESPN Fantasy app that has 12 million active users. ESPN Fantasy is not owned by Penn but is instead being leveraged to strengthen ESPN Bet’s operations in hopes of converting fantasy players to sports bettors.
Penn also continues to rebrand its physical sportsbooks into ESPN Bet spaces across the country. The company plans to fit eight of its casino sportsbooks with ESPN Bet décor and furnishings this fall.
Planned locations include L’Auberge Baton Rouge and Lake Charles, Margaritaville Bossier City, and Hollywood casinos in Kansas City, Plainridge (MA), Perryville (MD), Toledo (OH), and Columbus (OH).
Hollywood Greektown in Detroit was the first Penn casino to open an ESPN Bet sportsbook. The in-person sportsbooks, Penn says, drive increased retail visitation, build brand awareness, and enhance cross-sell opportunities.
Operational Upgrades
Along with moving “ESPN Bet Live” to the ESPN main channel temporarily and bringing ESPN Bet sportsbooks to its physical casinos, Penn officials say there are no plans to incorporate a surcharge on winning bets as DraftKings announced this week. The more than 3% surcharge could turn away some DraftKings bettors and entice them to find new sportsbooks.
Penn is additionally planning enhancements to the book’s dashboard and will soon upgrade the parlay carousel functionality. ESPN Bet is also expected to enhance its referral program.
We recently began the rollout of our ESPN BET product enhancements and will launch the remaining key upgrades before the start of college football and our launch in New York,” said Penn Entertainment CEO Jay Snowden.
Penn has tasked its new chief technology officer, Aaron LaBerge, with driving technology strategy and execution for Penn’s interactive platforms. LaBerge joined Penn on July 1 after 20 years working as president and chief technology officer at Disney Entertainment and ESPN.
After its launch in New York later this month, the ESPN Bet sportsbook will be live and accessible to approximately 46% of the adult U.S. population.
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