Penn Entertainment’s ESPN Bet App Outperforming Barstool Sportsbook
Penn Entertainment’s ESPN Bet mobile sports wagering application has been live for about two months, and state-level data indicate that the app is surpassing the performance of its predecessor, Barstool Sportsbook.
The app was launched in 17 states on November 14, and early data from some of these states show that ESPN Bet is generating more revenue than Barstool Sportsbook. In Maryland, ESPN Bet’s handle was $42.4 million in December, more than double the $16.4 million generated by the predecessor app a year earlier. Similarly, in Iowa, ESPN Bet’s December handle was $18.8 million, well ahead of the $7.2 million generated by Barstool Sportsbook in December 2022.
In addition, ESPN Bet jumped to third in terms of market share in Maryland last month, trailing only FanDuel and DraftKings. This impressive performance in such a short period has caught the attention of industry analysts.
Promotional Spending Strategy
Despite concerns about new operators overspending on promotions to attract clients, Penn has managed its promotional spending well since launching ESPN Bet. Bank of America analyst Shaun Kelley noted that the operator’s promo spending in Kansas, Kentucky, and Maryland was tolerable. Additionally, the operator’s current bonus offer for new clients has been reduced to $150 from the original $250, indicating a strategic and effective approach to spending.
Penn estimates that its relationship with ESPN could add $500 million to $1 billion in long-term adjusted earnings before interest taxes, depreciation, and amortization to its interactive gaming unit. However, ESPN Bet is expected to generate a loss of at least $100 million this year, with profitability not expected until 2025.
Positive Impact on Market
The emergence of ESPN Bet has had a positive impact on the industry, with elevated promotional spending activity across the board. Some data points suggest that ESPN Bet may have taken market share from BetMGM and DraftKings immediately following its November debut. DraftKings noted that ESPN Bet has the potential to grow the market of US sports bettors, which would benefit the industry as a whole. This indicates that ESPN Bet’s presence is driving growth in the market rather than simply shifting market share from other operators.
Overall, the performance of ESPN Bet thus far has been impressive, and the app’s potential for long-term success is generating optimism in the industry.