Since the announcement of ESPN’s partnership with Penn Entertainment, ESPN Bet has made rapid strides toward capturing market share in the sports betting industry.
So much so, in fact, that the sportsbook is now vying with market leaders DraftKings and FanDuel, and will look to compete for a top-three spot when North Carolina sports betting launches.
Where ESPN Bet has made the biggest strides
To contextualize that rise, Dec. 2023 was the first full month for ESPN Bet. According to Straight To The Point, an industry newsletter from Steve Ruddock, in Iowa, ESPN Bet realized $18.8 million in total bet spend (handle), which equated to 6.7% market share behind only DraftKings, FanDuel and Caesars.
ESPN Bet passed BetMGM for fourth in this market after just one full month. In Maryland, ESPN Bet managed $42.4 million in handle, capturing 7.8% of the market share.
ESPN Bet’s numbers from Indiana and Massachusetts looked similar. In Indiana, ESPN Bet’s handle tally was $33 million in December or 6.8% of the market share. In Massachusetts, ESPN Bet captured 8% market share, or $50 million in wagers.
Promo spending bolsters ESPN Bet’s totals
While this rise may seem surprising, Penn’s promotional spending has contributed significantly to the number of users flicking to ESPN Bet.
In the first ten months of 2023, Penn’s total promo spending amounted to just over $14 million in Ohio, Pennsylvania and Maryland. In stark contrast, Penn’s promo spending in November rose to nearly $57 million in these three states, four times more than in the preceding ten months.
This increase came entirely from ESPN Bet’s launch in seventeen states in November 2023.
While PENN’s spending spree pushed ESPN Bet’s app download totals and total bet spend up the charts, it didn’t lead to an increase in bet spending amongst other top operators. As the financial team at Jefferies noted, major sportsbooks, including FanDuel, BetMGM and DraftKings reduced their “absolute dollar promotional deductions in each month” of the NFL season. This, despite ESPN Bet’s arrival on the scene in the final third of the season.
Penn betting big on ESPN
Penn Entertainment appears unlikely to slow its marketing spend, especially after finding a reputable partner in ESPN following a failed partnership with Barstool Sports.
Back in January 2020, Penn purchased 36% of Barstool Sports. That contract allowed Penn the option to buy the rest of the company, which subsequently materialized in February 2023. The total value of that deal stood in excess of $550 million. After a strained relationship, Penn sold Barstool back to its founder for $1.
Penn then went on to sign a deal with one of the world’s most recognizable sports brands: ESPN. Here are the details of that deal: Penn will pay ESPN $1.5 billion over a period of a decade while also granting ESPN warrants to purchase shares worth $500 million, vesting over the same period.
“With ESPN you’re talking about a brand that everybody in the world knows about,” PENN CEO Jay Snowden said in August of last year. “It’s not an old brand. It’s not a young brand. It’s an everything brand. There’s a lot of affinity for that brand. And so we think that’s going to be extremely complementary to what we’ve built over the course of the last three years.”
What does ESPN Bet’s rise mean for North Carolina?
If there is one certainty about all this, it is that Penn intends to deploy funds to strengthen its hold on the burgeoning sports betting industry in the USA. It is highly unlikely that NC sports betting bonus offers from ESPN Bet NC will be any different.
According to Earnings and More, a +More Media industry newsletter, ESPN Bet accounted for 46% of Penn’s promo spending in the states of Maryland, Massachusetts, Indiana, and Iowa in November.
As North Carolina finds its feet before its imminent launch – according to state laws, North Carolina sports betting has to be introduced between Jan. 8 and June 14, 2024 – we know Penn will continue to spend heavily on states where sports betting is already legal.
At the moment, a March Madness launch of North Carolina online sports betting looks like possible. Gov. Roy Cooper, at least, has made this point no fewer than three times.
In the quest for superior market share and first-mover advantage, Penn will continue to push promo spend on ESPN Bet to make their play on top operators to find a place at the top of the North Carolina–and the US–sports betting market.
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