“There was an inevitability about this,” ESPN’s Mike Morrison says of the sports giant’s move into betting.
Partnering Penn Entertainment to launch ESPN Bet brought years of speculation – and the operator’s partnership with Barstool Sports – to a close. This was momentous at every level.
First, the announcement came as a surprise. Penn’s sportsbook now connects with a vast audience, potentially catapulting the operator’s interactive business to the top tier of operators.
To the general news connoisseur, beloved multimedia behemoth the Walt Disney Company – owner of ESPN – entered the sports betting race.
ESPN Bet: A deal five years in the making
Sports betting is a natural extension for ESPN and speculation over deals with DraftKings and Caesars Entertainment was rife.
Morrison says its designs on the sector stretch back to 2018. That year the Supreme Court’s repeal of the Professional and Amateur Sports Protection Act (PASPA) looked more of a sure thing than a long shot.
“We began looking at the sports betting space in 2018, ahead of the repeal of PASPA,” he explains. “We had some sense that things could change and we began to tee up a strategy and process about how ESPN might get involved in sports betting.”
ESPN reviewed its existing content to figure out where best sports betting content could engage potential bettors.
“What that meant was incorporating sports betting odds and sports betting content more significantly into our shows and developing programming around sports betting,” he says. “For ESPN, this was a really big move because historically we had not referenced sports betting at all. We really steered clear of it.”
Not just a box-ticking exercise
The idea to partner with a well-known operator in the space picked up steam later, in 2021. Naturally, ESPN had numerous key conditions to meet.
“We needed a partner that obviously has market access, that has strong leadership, is effective at gaining state licences, has the highest amount of integrity and has the capabilities across compliance, product, technology, marketing, etc.,” he lists.
Just a handful of companies were really able to meet ESPN’s standards, Morrison admits. “Frankly, there are challenges in finding a really good fit because there are probably only a few key players in the industry that really fit from our standpoint and met all the requirements.”
“It made sense for sports fans wanting to bet”
ESPN’s reach is massive and it is hugely popular. Although Morrison stresses the importance of finding the right partner, he is well aware that ESPN’s brand status is already a selling point.
“We felt that having the ESPN brand integration was incredibly important,” Morrison notes. “But the research said that, in other words, there’s a high degree of brand trust.
“Some of the work we did with focus groups said look, ESPN Bet would become a well-known sports betting brand that lots of fans would use if it were available today.”
Among the key players lay Penn. Morrison says it was Penn’s M&A track record that proved it could handle the degree of sports-media integration that ESPN needed.
“They [Penn] made theScore acquisition in 2021,” says Morrison. “TheScore team came from media and launched a betting app. We felt great synergy with that group in terms of the understanding of media, understanding how to succeed, understanding how to have incredibly strong product and how to curate content.
“It made sense for sports fans wanting to bet.”
Preparing for launch
With the deal now in the public sphere, ESPN Bet’s go-live date looms.
Penn initially suggested an “autumn” launch was on the cards. However, Jay Snowden, CEO and president of Penn, later revealed ESPN Bet will launch in November this year.
It’s perhaps a mark of confidence that the brand will launch when the National Football League (NFL) season is in full swing. In the early stages of sports betting, operators could get away with rolling out incomplete products to gain first-mover advantage. Today, product is becoming the new battleground, so it’s a case of perfecting the offering rather than simply getting to market.
“There’s always a sense of urgency to get things into market quickly,” Morrison says. “Our point of view is, let’s make sure we get this right and that everything is in place for launch.”
And for the launch to be a success, making sure ESPN Bet and Penn coordinate plans is critical. “Our plan is to have this be a very effective launch and have a high impact,” Morrison explains. “It’s important for us to be prepared on both sides for that to happen, for it to be successful.”
What’s ESPN Bet’s standing in the market?
The announcement of ESPN Bet set forth a litany of industry reactions, spawning a number of think-pieces and generating a significant social media buzz. But that’s just conjecture; Morrison believes the litmus test comes with the launch.
“It’s been incredibly positive,” Morrison says. “We’re not in the market yet with the launch, so I think that will be assessed when it actually launches later this year.”
But even though the ESPN name carries weight on its own, that doesn’t mean the sportsbook launch comes without pressure. Morrison stresses ESPN Bet will stand shoulder to shoulder with the market-leading products.
“[Penn is] ultimately driving this, so we need to feel incredibly comfortable with that partner aligning with us, in terms of our perspective, and being able to deliver what we expect to be an incredibly high-calibre user experience,” he explains.
“Something that, if you sat it alongside other platforms and other properties, stood up.”
The stakes are certainly high for ESPN Bet’s launch. It’s the world’s leading sports media brand and parent company Disney’s first attempt at embracing betting. But far from feeling the pressure, Morrison believes the sportsbook’s place in the market is all but carved out.
“We recognise that it’ll take some time to get to levels where we’re impacting the market in terms of overall gross gaming revenue and market share, but we have robust expectations here,” says Morrison.
“As things become live and the market sees ESPN Bet our path to success will be pretty clear.”