ESPN Bet went live around 3:30 p.m. ET on Tuesday, a launch that carries PENN Entertainment’s hopes of competing with DraftKings, FanDuel, and a handful of other sports gambling companies that dominate the space.
And PENN wasn’t messing around with the promos, offering those who sign up a deposit match and up to $250 of free bets — promos that have become less generous in the maturing legal U.S. online sports market of late. Promos were offered to new customers and those who use PENN’s Barstool Sportsbook & Casino app, which had about 2% of the market.
“We’re extremely proud to introduce ESPN Bet and look forward to delivering an exceptional customer experience to fans across the U.S,” PENN CEO and President Jay Snowden said in a statement to Front Office Sports.
ESPN Bet was the most-downloaded app on Apple’s App Store by on Tuesday.
In August, PENN entered into a 10-year, $2 billion deal to become the face of ESPN’s full-fledged entry into sports betting, one that family-conscious Disney, ESPN’s parent company, resisted in the aftermath of the 2018 U.S. Supreme Court decision that cleared the way for states to offer sports gambling.
ESPN began using ESPN Bet lines before Tuesday’s launch, and there will be plenty of ads running on ESPN’s various platforms. The ESPN Bet’s X (formerly Twitter) and Instagram accounts have to 7.4 million followers combined after ESPN rebranded their SportsNation accounts.
PENN, meanwhile, is handling things just as it did over the last three years when its app had Barstool branding. That means PENN will set the lines, handle regulators in each state and run all the technology — from authentication to paying out bettors — on its end.
On the first day, only some relatively minor hiccups were voiced on social media.
- The app on both iOS and Android took some time to find in their respective app stores.
- The bettor verification process led to lengthy delays for several people.
- Some existing Barstool users had some issues logging into the ESPN app.
“We could not be more excited to roll out ESPN BET in partnership with ESPN,” Snowden said. “PENN’s operational excellence paired with ESPN’s unmatched brand and reach is a powerful combination that will drive this compelling new sportsbook.”
The ESPN Bet iOS and Android apps, and the web version of the sportsbooks look very similar to the Barstool app that was taken offline before Tuesday’s launch. PENN was forced to take a loss of more than $900 million over its acquisition of Barstool, which was sold back to founder Dave Portnoy for a dollar when the ESPN partnership was announced in August.
Snowden warned that the promotions that will continue over the next several quarters will be a drag on profits as PENN spends to lure in customers — and this launch may not even provide bettors with the best deals to sign up for ESPN Bet.
But the hard work lay ahead.
Getting bettors to try a new app is one thing, and many no doubt will in the days and weeks ahead — especially if the promos make it hard to resist.
The rub, however, is retaining those customers, who have become loyal to another betting platform.
That will make the days after somebody signs up for ESPN Bet crucial. If the user experience is better or at least equal to the app they use now, it’s a much cheaper proposition to get them to stick around than having to offer more and more promotions to keep customers engaged.
“ESPN has 200 million visitors and 12 million paid subscribers, but the key isn’t those demographics,” said analyst Dave Wakeman, founder of WGC. “Instead, it’s behavioral segmentation and relative differentiation.
“High-value bettors bet over $500 a month, but they are also highly sought-after customers. Customer acquisition isn’t as simple as rolling out the app, running some ads and promos, and raking in the cash. You are going to have to offer these high-value targets something unique.”