ESPN BET loses $7.8M on PA launch as state promo spend jumps 42%

person looking over cliff edge
Image: Shutterstock

The Pennsylvania Gaming Control Board has blamed the launch of ESPN BET for a 75% annual fall in adjusted sports betting revenue for November. 

Data from the regulator showed that sportsbooks made just $12.9 million from their operations last month, collapsing from the $52.9 million that operators made in November 2022. Adjusted gross revenue takes into account promotional spending. Gross gaming revenue for the month amounted to $49.1 million, down from $73.6 million in October.

Promotional spending for the month jumped from $25.5 million in October to $36.3 million in November.

A PGCB statement attributed the sharp fall in AGR to the launch of ESPN BET as the new brand spent heavily on promotional credit. Meanwhile, a low hold rate was also blamed for the anomalous drop in revenue. 

“The Board explains the steep drop in revenue occurred due to both the offering of a significant amount of non-taxable promotional play by the newly-launched ESPNBet operated by under the Hollywood Casino at Penn National Race Course sports wagering certificate and a low hold percentage that benefited bettors.”

Bettors set a new record wagering $934.1 million last month, eclipsing the previous record which was set in October, and displaying that the market is still growing despite being almost five years old. 

ESPN BET incurred a $7.8 million loss in AGR from its Pennsylvania operations in November, having spent almost $15 million in promotional credits. It is also worth noting that the new app only launched on Nov. 14, amplifying the amount of money it has spent on enticing new users. The promotional spending did contribute to a bump in handle that moved ESPN Bet ahead of both BetMGM and Caesars in terms of market share.

This offset all of the revenue that DraftKings made in the state, as the firm generated $7.8 million in AGR for last month. But out in the lead was FanDuel, which generated $8.4 million from last month’s operations.  

On the online casino side, revenue reached $155.7 million in November, which was up 21.9% YoY. Evidently, this was entirely eaten up by the decline in sports betting revenue. 

However, it is tough to decipher the operator rankings, as numerous operators are grouped together on a single license.