ESPN Bet and Penn Entertainment have launched the next step in their long-term plan to compete with top online sportsbooks, aiming to deliver a unique user experience by powering their app through the Worldwide Leader in Sports.
ESPN Bet accounts can now be linked directly to Disney ESPN accounts through the sports betting app’s settings tab, the “My Bets” tab, and various prompts throughout the user journey, Penn announced Friday. The latest versions of the standalone ESPN app and ESPN.com also provide access to linking.
ESPN Bet account linking is just one step
Account linking opens the door to further personalizing betting experiences based on a user’s ESPN fantasy team or favorite sports team or player and aligns with Penn’s main selling point for executing the $1.5 billion ESPN deal. However, when it comes to fully utilizing ESPN as an asset and monetizing its digital and social reach, Penn views this as just one stepping stone among many to come.
“Bringing this new feature to market is an important step as we work to create a fully interconnected media and betting ecosystem between ESPN and ESPN Bet,” said Aaron LaBerge, chief technology officer at Penn Entertainment. “Account linking allows us to better serve and engage our users by unlocking key personalization and promotional capabilities. This feature is just the beginning of deeper integrations that will further differentiate the ESPN Bet experience.”
Penn plans to roll out more user-facing marketing around account linking in the near future. It estimates that ESPN has nearly 181 million monthly users.
Penn completes short-term integration timeline
Ahead of the NFL betting season, Penn launched the first of many integrations highly anticipated by investors since signing the ESPN deal in August 2023. These included targeted ESPN Bet offers within the ESPN Fantasy App based on users’ fantasy rosters, ESPN Bet odds integrations within the flagship ESPN app, and dedicated betting odds and futures pages on the ESPN website. Alongside those integrations, Penn has also worked to expand its non-ESPN-reliant product by improving same-game parlay capabilities and early payout offers.
The linking feature’s timing aligns with what Penn CEO Jay Snowden promised investors during the company’s most recent earnings call, indicating updates would continue throughout the football season and that account linking would be available by November. All the end-of-year product enhancements Penn announced with its Q2 earnings are now completed.
Snowden and LaBerge, who formerly oversaw technology for Disney and ESPN, have been vocal about reducing friction in the app-to-app journey, as many users follow their bets on dedicated scores apps.
“When we think about the fan, ESPN Bet and the ESPN app are inextricably linked. And so moving between those two environments and where you want to consume content and how you consume it, we aren’t going to necessarily care where that happens,” LaBerge said during the company’s Q2 earnings call. “And so that line, obviously, we’re currently working with ESPN to make sure it makes sense. But the goal is that you can move between these apps really fluidly and get what you want, where you want it. Like for example, when we have account linking in November, if you place a parlay on ESPN Bet, it’s going to appear in the ESPN app. You have to do no work. It’s going to be seamless.”
ESPN integrations take the front seat
Snowden has emphasized that further technological integrations with ESPN will help acquire customers while reducing promotional spending. He highlighted this ahead of the company’s September launch in New York, one of the most challenging markets for online sportsbooks due to its 51% tax rate.
In its first four weeks in New York, ESPN Bet captured 1.8% of the total state handle ($37.4 million) and 1.9% of its gross gaming revenue ($2.61 million), positioning it in competition with BetRivers for the No. 6 spot in the state, behind FanDuel, DraftKings, BetMGM, Caesars, and Fanatics.
From January to September, 2.8% of ESPN Bet’s handle and 40% of its revenue came from promotions in markets where the average rate was 3.2% of handle and 30% of revenue. Since ESPN’s hold is lower than most, its promos make up a larger share of revenue compared to other brands. This is slightly down from the same period a year earlier for Penn.
However, compared to newer brands like Fanatics and bet365, ESPN Bet is spending much less on promotions. During the same timeframe, 6% of Fanatics’ handle and 65% of its revenue came from promos, while at bet365, promos accounted for 6.2% of handle and 61% of revenue. As ESPN Bet’s promotions have decreased, so has its market share.
Penn to provide updates in a week
According to Citizens JMP Securities, ESPN Bet was No. 6 in handle share during Q2 at 3.2%, down from 4.7% in the first quarter. Its overall interactive business did improve during the quarter and outperformed Wall Street estimates, though it still recorded $102.8 million in negative EBITDA.
PENN stock is up 3% to $19.42 a share since the start of the NFL regular season, though still down 24% this year.
Investors should have more updates on ESPN Bet’s New York performance and early returns from its integrations when Penn announces its third-quarter earnings on Nov. 7.
