Penn Entertainment and ESPN executives provided analysts and investors at the Global Gaming Expo (G2E) with more details about ESPN Bet’s upcoming launch on Monday. Penn CEO Jay Snowden and Mike Morrison, ESPN VP of sports betting and fantasy, reaffirmed the parties’ intention to launch the product in November, as Penn works to rebrand its Barstool Sportsbook.
Snowden, who had previously said the debut would take place before Thanksgiving, noted most of the features on ESPN Bet should be available from launch. If the app debuts on Thanksgiving, Nov. 23, it would be live for at least seven weeks of regular season NFL betting action and operational ahead of the playoffs commencing in mid-January.
The availability of most features from the get-go is key for Penn, as Snowden has touted theScore Bet’s success in Ontario as a blueprint for ESPN Bet. After theScore Bet moved to Penn’s proprietary platform, the brand saw a 108% increase in customer retention in the following six months.
According to Steve Wieczynski of independent investment bank Stifel, the experience with theScore Bet was key in Disney partnering with Penn, with shared “cultural values” between the two companies also highlighted.
Offering further insights on the upcoming launch, Snowden said a November launch would be a good idea as bettors might run out of promotional dollars from the beginning of the season by that date. This, in turn, may result in them being more likely to give ESPN Bet a try.
In its report, Wieczynski also noted Penn signaled its intention to spend about the same on promotions as its peers in the wagering space, with those marketing dollars to be incremental to both the $150 million annual payment to ESPN and $150 million earmarked for ads.
While ESPN is now entering the betting market, this does not imply other sportsbooks will be blocked from advertising with the sports giant. According to analyst Barry Jonas of Truist, limited media spots could be available to competitors, as long as the deals are economically favorable for ESPN.
Penn and ESPN first announced their plan to rebrand Barstool Sportsbook as ESPN Bet back in August, with Penn simultaneously terminating its ownership of Barstool Sports and turning it back to founder Dave Portnoy. The app is expected to debut in the 16 states in which Penn is licensed upon its November launch.
During a recent presentation to the Massachusetts Gaming Commission, Penn assured the regulator that there would be no change in the management structure related to the new sportsbook and that ESPN won’t have a role in sportsbook operations, which will remain solely under Penn’s purview.
Penn is paying ESPN $1.5 billion over the next 10 years and granting ESPN the option to purchase 31.8 million shares of Penn stock worth $500 million. The warrants will vest over the same 10-year period.