ESPN Bet, the new mobile sports betting app from Penn Entertainment, is making a strong start in several US states, according to a report from Macquarie analyst Chad Beynon. In Indiana, Iowa, and Maryland, the app has captured a double-digit share of gross gaming revenue, indicating a positive response from bettors.
This positive response is good news for Penn, as the company has invested heavily in its partnership with ESPN to create ESPN Bet. This partnership saw Penn paying $1.5 billion to ESPN’s parent company, Walt Disney, over 10 years, along with $500 million worth of warrants. This deal also led to the end of Penn’s relationship with the Barstool Sportsbook brand.
The success of ESPN Bet in these initial states is in contrast to the lackluster performance of Barstool Sportsbook, which failed to gain significant market share in most of the states where it operated. Despite this early success, there are still concerns about the impact of heavy promotional spending on the app’s performance.
However, the November data from Iowa, Maryland, and Indiana indicate that ESPN Bet is indeed performing strongly, with a growing share of gross gaming revenue. This has led analysts to have an optimistic view of the app’s potential, with Needham’s survey of hedge fund managers suggesting that ESPN Bet’s market share could be even higher than initially anticipated.
While ESPN Bet’s performance is still a long way from reaching the levels of industry giants like DraftKings and FanDuel, the positive start in these states is seen as an encouraging sign. Analysts also believe that the promotional activities surrounding the app could further boost its performance.
Overall, analysts are cautiously optimistic about ESPN Bet’s potential, with the app’s strong start in select states indicating promising growth prospects. This is good news for Penn, as it seeks to establish itself in the highly competitive online sports betting market.