The biggest name in US television is investing in the lucrative gambling industry, launching an online betting platform that will be available in 17 states.
ESPN has partnered with Penn Entertainment, the provider of sports and casino games that previously launched the Barstool Sports book, to create a betting service, called ESPN Bet. The platform began registration on Thursday, but still needs approval from the gaming commissions in each state.
ESPN is getting into the sports betting business as parent company Disney looks to boost profits at the entertainment giant. However, despite the increase in gambling as more countries accept it, the broadcaster will face competitors such as DraftKings and FanDuel, which control about 80% of the online betting market.
“ESPN and Penn believe they can tap into this market,” Andrew Brandt, a marketing professor at Villanova University, told CBS MoneyWatch. “They want to make it like a one-stop shop where you go to see the score and there’s your betting opinion right there. They think they can offer a better product.”
The countries that will start offering ESPN Bet are:
- New Jersey
- West Virginia
Making ESPN Bet is a smart move for both Penn and ESPN. The publisher is looking to increase revenue by supporting gambling enthusiasts, while Penn was looking for a sports betting partner after exiting its deal with Barstool, Brandt said.
For both companies, what’s at stake is capturing a piece of the growing gambling industry. Bet on DraftKings, FanDuel, Caesars Sportsbook and BetMGMas many fans with time on their hands place bets. Those companies have grown significantly in recent years as some countries legalize online gambling.
$100 billion in bets
Online sports betting is now legal in 27 states, and Americans are expected to bet more than $100 billion on the game this year, according to the American Gaming Association.
“It’s a fertile market even though it’s crowded,” Brandt said. “With sports betting legalized and widespread, it’s becoming an avenue for younger people.”
Despite its sports coverage, ESPN is a relatively late entrant. Many existing gambling companies set up shop within months of ain 2018 that violated federal law prohibiting gambling on football, basketball, baseball and other sports. Sports company Fanatics also launched an online sportsbook in August.
The size of the sports betting. Others, like NCAA President Charlie Baker, are concerned about how gambling could affect college sports.
Baker recently told CBS News that there can be a lot of pressure on student athletes to perform well in college sports because a family member or friend has bet on the competition.
“That is now on your phone [and] you can do it whenever you want, it’s a challenge — not just for us, but for the student-athletes,” Baker told CBS News earlier this month.