ESPN BET Hopes to Turn Pressure Into Success in the Coming Months

Disney-owned ESPN BET has a lot on the line in the next six or so months as the Worldwide Leader in Sports tries to realize its lofty yet still-unsatisfied goals and become one of the nation's best sports betting sites.

Heading into the bread-and-butter NFL season, ESPN BET, since launch has largely been unable to gain a desirable market share in the U.S. jurisdictions it has a presence. The brand has yet to be able to cut into the combined approximate 80% market share owned by FanDuel, DraftKings, BetMGM, and Caesars in the American market.

The goal of ESPN BET brass was to have a 20% market share in the coming years. So far, the brand is far from that goal. Through it all, the 2024-2025 NFL season feels like a make-or-break season for the brand.

Penn Entertainment is taking swings

The old adage “you'll never hit the ball if you don’t swing” can be applied to Penn Entertainment.

It had zero casino presence in the “grand-daddy state of American legal sports betting” - Nevada - before the 2018 Supreme Court decision to overturn its blanket ban on sports wagering, has attempted to become a top name in the industry through partnerships with high-profile names in the mobile sports betting realm.

Penn partnered with Barstool Sportsbook to bring sports betting to some-18 states in America in what was rumored to be a deal in the hundreds of millions of dollars. It then purchased theScore Bet for $2 billion to create a one-stop legal sports betting destination.

Fast forward a few years, and those partnerships were all but finished when Penn Entertainment sold Barstool back to Dave Portnoy for $1, shuttered theScore in its American jurisdictions, and partnered with ESPN BET in what was a whopping 10-year, $1.5 billion deal.

You can check out its newest shiny toy by using our ESPN BET promo code.

Expectations are sky-high for Penn Entertainment and the ESPN BET brand. The companies have seen other high-profile sports betting brands come and go in the competitive American market and hope to eliminate the chance of becoming another failed Penn Entertainment mobile sportsbook project on U.S. soil and instead join the ranks of the best sports betting apps.

Recent revenue figures

Penn Entertainment released its Quarter 2 revenue report this week, and the figures are not all that flattering.

The company reported net income losses of $26.8 million in the second quarter of fiscal year 2024, off of $1.66 billion in revenues. ESPN BET specifically reported $232.6 million in revenue for the quarter and reported EBITDA losses of $102.8 million for the three-month period. It has resulted in mass layoffs in an effort to boost growth.

The reason for the losses? Despite huge promotional output, ESPN BET has yet to gain a double-digit percentage market share in any of the 18 states in which it has a presence. Its performance is equal to, or sometimes worse than, Penn Entertainment's with the Barstool brand. 

Optimism

Despite the underwhelming traction that the ESPN BET brand has gained since launching last year, there are some positive signs for the company as we head into the crucial NFL season.

First, and possibly most importantly, is the impending launch of the product in the New York sports betting market, by far the most successful legal sports betting state in the country. 

While encouraging, there is still the matter of a 51% tax rate for sportsbooks in the Empire State. ESPN BET will likely see a surge in overall monthly handle, but revenues from such a highly taxed state are still an open question.

ESPN has promised to integrate ESPN BET better into all its award-winning programming. Starting this season, the brand will be tied to ESPN’s massive Fantasy Football crowd. Crucial, lucrative, single-game parlay betting options will also be focused on.

The Penn Entertainment/ESPN BET partnership is under pressure in the next few months to create some buzz, close the gap on FanDuel and DraftKings, and stop the reported monthly losses in the tens of millions.

By the end of the 2024-2025 NFL season, we are widely expected to know where ESPN BET stands in the competitive U.S. legal sports betting market - good or bad.