Investors and analysts interested in Penn Entertainment and Disney heard more about the plans for ESPN Bet at the G2E conference Monday in Las Vegas.
Penn CEO Jay Snowden and ESPN VP of sports betting and fantasy Mike Morrison gave some additional color about the new partnership.
ESPN Bet is expected to launch in November as Penn works behind the scenes to rebrand Barstool Sportsbook. Snowden previously said that launch should be before Thanksgiving, meaning the app should be live for at least seven weeks of regular season NFL betting before the playoffs start in mid-January.
Most ESPN Bet features available at launch
Most of the features on ESPN Bet should be available from launch, Snowden said, according to analyst Barry Jonas of Truist. ESPN Bet could lag behind DraftKings and FanDuel in hold at first given their more sophisticated same-game parlay (SGP) offerings, Snowden added.
The fact that most features will be available is important, as Snowden has been touting theScore Bet’s success story in Ontario as a blueprint for ESPN Bet. Penn saw a 108% increase in customer retention six months after theScore Bet moved to Penn’s proprietary tech platform.
Other key stats that will be important to ESPN Bet’s success: 72% of users and 73% of handle came from theScore’s media app over those six months.
Experience with theScore Bet set Penn apart
The experience with theScore Bet helped set Disney apart from other potential partners throughout the process, Steve Wieczynski of Stifel wrote recently.
The two companies also share aligned cultural values, which also stood out during the process, he noted.
Snowden also called out the UK‘s Sky Bet as a comparison. The operator holds a 20% market share despite issues combining media and betting at launch, something neither Penn nor Disney expects with ESPN Bet.
Additional ESPN Bet spending coming
Snowden continued to pitch a November launch as positive, suggesting bettors may be out of promotional dollars from the beginning of the season and therefore more likely to give ESPN Bet a try.
Penn will spend about the same on promotions as its peers, Wieczynsk wrote. Those marketing dollars will be incremental to both the $150 million annual payment to ESPN and $150 million earmarked for ads.
That left Wieczynski to lower his EBITDAR expectations to $1.76 billion for 2023 and $1.67 billion for 2024. Wieczynski’s PENN target fell to $27 from $30 on the updates.
Wieczynski maintained his hold rating on the company but said there is almost zero value embedded for the Penn/ESPN partnership in the current price. Penn closed at $21.88 on Monday.
Can other sportsbooks advertise on ESPN?
Just because ESPN is in the betting business now does not mean others will be blocked from advertising with the company.
Limited media spots could be available to sports betting competitors on the condition that the deal is favorable economically for ESPN, Jonas noted.