ESPN BET to launch in 17 states on November 14

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Penn Entertainment and ESPN have confirmed that the new ESPN BET sportsbook app will go live in 17 US states from November 14. 

The launch, which will see the closure of the Barstool Sportsbook app, follows the nearly $2bn deal between the two companies as they attempt to create a successful media sportsbook brand. 

Taking over the Barstool brand, ESPN BET will utilize Penn’s proprietary technology platform, use the ESPN branding and leverage ad space on the ESPN media channels and use certain ESPN star talent. 

The states that ESPN BET will launch in are Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.

Ahead of the launch, ESPN is now using official odds provided by ESPN BET across editorial and other content to raise the app’s profile before it goes live. 

Meanwhile, ESPN released an advert featuring SportsCenter anchor Scott Van Pelt. He receives notifications from both the ESPN and ESPN BET apps, showcasing the cohesiveness between the two brands.

The Daily Wager show will also undergo a rebrand to ESPN BET Live to consolidate the ESPN BET brand across all related products. 

Jay Snowden offers insights into ESPN BET launch

Penn CEO Jay Snowden addressed the launch during the group’s Q3 earnings call earlier today, explaining the strategy behind the date of launch: “This allows us to take advantage of a very active Thanksgiving week sports calendar, which includes the NCAA college football rivalry week, and the Super Bowl rematch of the Kansas City Chiefs in the Philadelphia Eagles, which will be televised on ESPN Monday Night Football. 

“In connection with the launch, ESPN will be implementing an initial wave of exclusive integrations across the ESPN ecosystem, which includes 200 million unique monthly users in the US more than 12 million of whom are regular users of the nation’s number one fantasy sports app at ESPN.”

The CEO also explained some of the key projections for the launch and at what point it may become a profitable venture. 

Snowden had previously stated that ESPN BET will aggressively spend on promos to ensure it can quickly capture market share in the online sports betting market. Today he told investors that losses should peak between Q4’23 and Q1’24 as it spends on promotional material and bonuses until the Super Bowl and March Madness college championships. 

On the P/L statement projections, Snowden told investors: “While we anticipate accumulated EBITDA losses of approximately $300m over the next three years, you can see that we expect to grow our total cash position by more than $1bn over these three years. 

“Going back to the interactive losses anticipated, you should expect those to occur mostly in year one and year two, with year three and flexing to break even or modestly positive EBITDA, which bridges nicely to the ranges of EBITDA we provided on our last earnings call when you get to 2027.”

Analysts were eager to know more about the strategy of the app’s launch, particularly around keeping hold of the two million Barstool Sportsbook users versus acquiring ESPN’s database of users via its fantasy sports app. 

Snowden kept his cards close to his chest in terms of market share targets and retention aims, but did explain that the synergy between fantasy sports players and sports bettors is a huge competitive advantage that it will seek to leverage in the coming months. 

“There’s the opportunity to cross-sell from the ESPN media ecosystem into ESPN that we like our chances there, particularly with the 12 million in their fantasy database, there’s a high propensity to bet on sports, as we know, with fantasy players. 

“I think one of the things that we’ve talked about internally in terms of what success looks like is that we want to see market share in the first couple of months, we want to see that continue to grow over time, but we don’t, and that will speak to the product and the retention, want to have is a giant splash in the first month or two.”

In Q3, the Penn interactive division, inclusive of Barstool Sportsbook and theScore in Ontario, posted revenues of $196.3m and an adjusted EBITDA loss of $50.2m.