ESPN BET Launch May Be Helping Sports Betting Incumbents, Not Hurting

"I think there's been a pretty rational launch from PENN and ESPN," DraftKings CEO Jason Robins said on Monday.

Dec 4, 2023 • 15:22 ET • 4 min read
Photo By - USA TODAY Sports

A rising tide of online sports betting sign-ups driven by ESPN BET could lift the boats of rival operators.

That is, at least, according to recent investment bank analysis and the head of one of those rivals, who doesn’t seem too concerned that arguably the biggest name in sports entertainment, ESPN, has partnered with a competitor, PENN Entertainment Inc. 

ESPN BET launched in 17 states on Nov. 14, but DraftKings CEO Jason Robins said Monday that the Boston-based bookmaker has dealt with "many waves" of competition.

“We've seen, I think, in the past some aggressive and even at times irrational competitive behavior,” Robins said during a virtual fireside chat at the third annual Craig-Hallum Online Gaming Conference. “I'm not seeing that now. I think there's been a pretty rational launch from PENN and ESPN. So we expect to continue to see that. I think they're playing for the long term, not to kind of come in and make a splash and disappear.”

Robins added that, in the short term, DraftKings has not seen any “material impact” on its business because of the ESPN BET launch. 

“I mean, the hope is they're bringing some new people into the market, which would be great,” he said. “I think that's good for everybody if the overall [total addressable market] is growing.”

The bigger problem, at the moment, is that sportsbook customers at DraftKings and other sites are cleaning up, Robins suggested. Week 13 of the NFL saw favorites win and cover in most games, which suggests another good outing for the betting public. Still, Robins said sports-betting outcomes usually even out over the long term. 

In the meantime, apropos of ESPN BET, the DraftKings chief executive said the company has “seen nothing to suggest that our trajectory is changing,” although it will continue to monitor the situation.

“We've seen lots of waves of competition,” Robins said. “And I think our expectation is that this is a competitive market, and we're going to continue to have to fight for the customer and build great product. And that's what we've been doing.”

The comments from Robins come as DraftKings and FanDuel remain the top two by online sports betting handle and revenue in the U.S. by a wide margin.

They are, however, facing fresh challenges from two brands with unique, non-gaming assets in Fanatics Sportsbooks (the sports-betting arm of sports merchandise giant Fanatics) and ESPN BET.

The worldwide leader in support

ESPN BET also continues to top the app download charts for online sportsbooks as the two companies behind it, PENN and ESPN, pump significant marketing dollars into promoting the new gambling platform.

Investment bank Jefferies noted on Sunday that ESPN BET accounted for 65% of all app downloads among leading online sportsbooks since it launched, while DraftKings and FanDuel accounted for 11% and 14%, respectively. 

Yet the interest in ESPN BET could ultimately translate into interest in its rivals, as bettors play through their sign-up bonuses and become more sophisticated in their wagering habits. JMP Securities reported Monday that, based on its data, the average bettor used 1.7 sportsbook apps during November, up 14% from a year earlier.

“We see ESPN Bet as incremental to the size of the market and not necessarily a threat to take market share from individual operators given the multi-book usage,” analysts from the investment banking firm wrote in a Nov. 21 note to clients.

More recently, JMP said its proprietary online dataset via Juice Reel showed bets per day and handle per player were up 21% and 15%, respectively, in November compared to a year earlier. 

“We believe the launch of ESPN Bet with generous sign-up bonuses supported an acceleration of wagering activity during the month,” they added.

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