SBC Rewind: ESPN Bet announcement underlines shift in sports betting market

ESPN logo on a TV
Image: Shutterstock / Anna Quelhas

As SBC Americas’s look back on the past year heads into the back half of 2023, the lead-up to football season dominated the headlines.

Namely, many operators were closing up shop, rebranding, and, in arguably the biggest story of the year, partnering with the Worldwide Leader in Sports.

Penn sells Barstool for $1 to team up with ESPN

After years of trying and hundreds of millions of dollars spent, Penn Entertainment officially wiped their hands of Barstool Sports, selling it back to Dave Portnoy for a single dollar. That alone would’ve dominated headlines for weeks, but that was just one piece of a blockbuster deal that brought together Penn and ESPN.

Disney CEO Bob Iger admitted other operators brought offers to ESPN but that Penn’s was “by far” the best offer financially for the company. Penn will pay ESPN $1.5 billion over the course of a ten-year period and certain benchmarks will also trigger an additional $500 million in stock warrants.

There is an option for the partnership to abandon ship after three years if it doesn’t seem like ESPN Bet is meeting the lofty expectations of Penn CEO Jay Snowden. During an earnings call, Snowden says the company expects to grab 20% market share, which is a far cry from the single digits Barstool Sportsbook was generating. The plan for ESPN Bet also included plenty of promotional and affiliate spending, which means Penn is putting a couple of billion behind this shift.

Operators like Wynn throw in the towel

While Penn chose to pivot, the summer was when many other operators just gave up altogether. A mere handful of days after rolling out a new app, Wynn announced it was shutting down WynnBet in eight states and remaining in states where the company has a brick-and-mortar presence, meaning just Massachusetts and Nevada. Michigan and New York remain under strategic review for the company.

Smaller operator PlayUp shut down after a tumultuous period of allegations from former staffers about missing payroll and general financial mismanagement. New Jersey regulators went so far as to revoke PlayUp’s license–something that was a first in the US in the post-PASPA era.

FOX Bet also officially closed its doors, leaving FanDuel as the only US sports betting brand for Flutter. While Betr didn’t close down operations in Ohio and Massachusetts, CEO Joey Levy did say the priority for the company was the new DFS product Betr Picks, which launched shortly before the start of football season.

As PointsBet finished the sale to Fanatics, smaller operators started to really question how to stay afloat until online casino rolled out in more states. At the National Council of Legislators from Gaming States summer meeting, Tipico’s Stephen Krombolz spoke on behalf of the smaller operators noting that regulators play a role in making it possible for them to enter markets.

States run the gamut on rolling out sports betting

For states that legalized sports betting in 2023, the rollout was a tortoise and hare story. Kentucky was the hare, rapidly approving regulations and operators for one of the fastest state rollouts yet. Gov. Andy Beshear demanded a launch in time for football season and promised the Kentucky Horse Racing Commission the resources necessary to get it done.

Vermont, Maine and North Carolina, on the other hand, took their time. North Carolina tapped former Massaschusetts Gaming Commission staffer Sterl Carpenter to head up the sports betting rollout, while Vermont took time to approve regulations and issue an RFP for operators.

Maine opted for more of a middle ground, aiming for (and achieving) a November launch.