ESPN Guess will formally shut down on Dec. 1 after a two-year run. In its renewed push into sports activities wagering, ESPN has struck a multi-year partnership with DraftKings. With the sports activities betting market rising quickly, the sudden shuttering of a enterprise backed by such a well known model has raised eyebrows.
ESPN Guess is operated by PENN Leisure, a on line casino and leisure firm, by a licensing settlement. The app lets followers place wagers throughout a variety of sports activities and groups, whereas integrating ESPN’s information, scores and evaluation.
Almost 1 / 4 of People (22 %) have a web based sports activities betting account, with major customers being males ages 18 to 49, in line with a Siena Ballot survey. The U.S. sports activities betting business generated $13.7 billion in income final yr, up from $11 billion in 2023, in line with the American Gaming Affiliation. The nascent business has continued to realize momentum for the reason that Supreme Court docket legalized sports activities betting in 2018. Right this moment, 38 states supply some type of authorized sports activities betting.
What precisely went fallacious with ESPN Guess?
Trade specialists level to a number of elements behind ESPN Guess’s collapse. A number one argument is timing: the product merely arrived too late. With DraftKings and FanDuel firmly entrenched on the prime of the sports activities betting market (commanding 44 % and 34 % of the market, respectively), breaking the duopoly has turn out to be more and more troublesome.
“If ESPN had began in 2018, there’s a greater argument it may have received on the finish of the day,” Dustin Gouker, a playing business advisor, instructed Observer. “However it could have trusted a number of different variables, together with the sports activities betting product itself, which many would say was subpar with PENN till just lately.”
Ross Benes, a senior analyst with eMarketer, mentioned ESPN Guess was “a multitude from the beginning.”
ESPN Guess is the successor to PENN’s Barstool Sportsbook, launched in 2020 by a partnership between PENN and Barstool Sports activities and shut down in 2023 after PENN bought the model again to its founder, Dave Portnoy. “There was the entire Barstool Sports activities factor and it was unclear the place that was going,” Benes instructed Observer.
“Barstool wasn’t nice at changing customers in partnership with PENN. ESPN was greater, however was arguably extra ineffective as the highest of the advertising funnel for the sportsbook,” Gouker mentioned. ESPN chairman Jimmy Pitaro mentioned the rebranding “drove over 2.9 million new customers into the PENN ecosystem.” ESPN Guess reached 1.1 million customers throughout its first week in November 2023. Earlier than the rebrand, Barstool Sportsbook had simply greater than 72,000 registered customers in Pennsylvania, the primary state the place it launched, in 2023.
ESPN maintains deep relationships with main sports activities leagues, together with the NFL, NBA, MLB and NCAA, by broadcast and media rights agreements. Whereas leagues have more and more embraced sports activities betting, that momentum has been sophisticated by scandals. The NBA is at present underneath investigation for a few of its expertise allegedly getting illegally concerned in playing. Benes mentioned it’s seemingly ESPN and its dad or mum firm, The Walt Disney Firm, are being cautious, making it simpler to outsource sports activities betting to a longtime operator like DraftKings. “They don’t wish to have one thing known as ESPN Guess whereas their prime companions are being investigated.”
ESPN Guess had been meant to “compete for a podium place within the house,” PENN Leisure CEO and president Jay Snowden mentioned earlier this month, when asserting the termination of the partnership. Snowden added that PENN plans to rebrand its U.S. sports activities betting providing to theScore Guess, which at present operates in Canada, and can “refocus” its digital technique on the corporate’s rising iCasino enterprise.
Below their preliminary deal, PENN agreed to pay ESPN $150 million a yr to be used of the sports activities community’s title. The partnership had a 10-year time period, however included a clause permitting both social gathering to terminate the settlement after the third yr if “particular market share efficiency thresholds weren’t met.”
Most observers agree the termination hurts PENN greater than Disney financially, significantly since ESPN alone generates billions of {dollars} from sports activities rights offers. In 2024, Disney reported $91.4 billion in income, making a $150 million loss comparatively small.
“When you consider it, $150 million is approach lower than it prices to supply one Marvel film,” Benes mentioned.
