ESPN Bet Misses Expectations and Now Experts Begin Questioning Sportsbook's Future

Written by:
Aaron Goldstein
Published on:

It was a tough 4th quarter 2023 for the newly launched ESPN Bet.


Sure the sportsbook app attracted a million new signups following a rebranding from Barstool Sportsbook.  Active users in Q4 rocketed to 771 million, up from 189 million in Q3.

Unfortunately the company’s digital unit lost an eye-popping $333.8 million.  Analysts predicted a $151 million loss.  Brutal.

Jeff Edelstein of SportsHandle wrote this week there is little that stands out with ESPN Bet when compared to market leaders DraftKings and FanDuel.  And they have no monopoly like Hard Rock Bet in Florida. 

"For a recreational gambler like myself –- maybe I bet five, 10 times a week –- going to DraftKings is, to me, the obvious choice. I know there’s going to be a boost, and if I like Devin Booker’s three-point prop at -110, I’m going to like it even more at +115."

DraftKings routinely offers a 33% boost on any college basketball bet and a 25% boost on any Same Game Parlay (SGP).

Edelstein points out that ESPN Bet features less appealing odds boosts.

"Over at ESPN Bet, the featured bet is a +400 wager on whether Stephen Curry and LeBron James will combine for over 64.5 points in the Warriors-Lakers game.

"One, I don’t know if this is an +EV bet, but I’m guessing it’s not. And two, James was ruled out –- 12 hours ago.

"Are you even trying, ESPN BET?"

Industry investor Chris Grove is bearish on ESPN Bet as well.  Penn Entertainment signed a $1.5 billion deal with ESPN for rights to the sports media giant's name back in August.  ESPN promotes the brand all over its channels, both on network broadcasting and via its website.

"In the coming weeks and months, I suspect it will become increasingly fashionable to point at PENN Entertainment, Inc's online sports betting market share with ESPN Bet and make declarations on the quality/relative wisdom/future prospects of the deal," Grove wrote on his LinkedIn page this week.

"In some ways, that might be fair. The early numbers certainly aren't overwhelming. And share distribution in the US market feels ~calcified in the aggregate. So (to borrow a line from Hey Mercedes), where you are is (likely) where you'll stay."

Grove says ESPN Bet must be measured with a different yardstick.

"First, there's a direct relationship between the depth of ESPN Bet's integration into the ESPN ecosystem and the success of ESPN Bet. From the outside, it looks like that integration is improving. But it will take time. So there's a slow and steady catalyst for ESPN Bet clawing its way up the share ladder."

The bigger factor is drift, he says.

"If you're locked into any large consumer ecosystem, you've probably encountered drift even if you never put a name to it.  I feel drift all the time as an Apple-centric consumer.  Apple Pay was around for a few years before I started using it. I couldn't for the life of me tell you why or when I started using it; eventually, I just did.

"I don't use everything Apple puts in front of me. I don't even use most of it. I couldn't tell you what's on Apple TV+ right now.

"But Apple has more opportunities to put things in front of me, more ways to put things in front of me, and more ways to incentivize me to use those things than anyone else who might try to get me to use something on my phone.

"Over time, I drift in the direction of trying Apple products."

He notes that ESPN is the closest thing to Apple in terms of sheer number of organic touches it gets across the largest number of fans in the sports space.

"Over time - assuming the ESPN Bet product keeps moving toward parity, and the integrations get deeper - those touches create a greater potential for drift than is readily apparent with competing brands.

"It may be that ESPN Bet's impact is less likely to be felt as a splash and more likely to present as a steady and wide-reaching ripple."

Brendan Tinnelly of Sports Trader agreed with the Apple assessment, but sees restrictions when it comes to ESPN Bet.

"Apple is undoubtedly the leading example of building and cross-selling within its ecosystem (as its litany of anti-trust law suits will attest). It's operating from an incomparable place of strength -- its devices and services play a huge role for consumers and businesses, including those it completes against. But even with these advantages, and even when self-preferencing its own services, aggressive bundling, and hobbling of competitors, many of its services (Maps, Music, Arcade, TV...) lag behind better quality products.

"On that front, ESPN Bet faces two challenges; 1) will Disney/ESPN throw the kitchen sink at the cross-sell mechanic, beyond what's stipulated in the brand license deal, and 2) is the ESPNBet product going to be strong enough to compete against FanDuel and DraftKings on its own merits?"

- Aaron Goldstein,

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